Hansard, Monday, 3 October 2022

Hon Members, with Singapore becoming more COVID-19-resilient, we have been easing safe management measures in the community. Here in Parliament, we have also been adjusting our measures, even as we continue to prioritise the safeguarding of Members’ health and well-being. And thanks to everyone’s efforts and strong commitment, we have moved steadfastly towards normalcy.

Hence, I am pleased that, starting today, we have taken yet another step forward. Members will now be seated according to the revised seating arrangement within the Chamber without the need for split team arrangement. This also means that all Members can now take their breaks together, in one room.

But even as we further ease the measures in Parliament, we will persist with a certain level of vigilance. And so, Members are still required to do an Antigen Rapid Test (ART) self-test before coming to Parliament House on Sitting days. And the seats in the Speaker’s Gallery within the Chamber will continue to be set aside for Members who are close contacts of COVID-19 cases but have themselves tested negative for COVID-19.

As always, we will monitor the public health advisories and make adjustments according to the prevailing situation.

Once again, I wish to thank all Members for your forbearance and diligence in adhering to Parliament’s COVID-19 measures, which had been in place since early 2020. Your efforts have allowed us to carry on with our duties as parliamentarians during a critical time for Singapore and have also facilitated our quick return to business as usual. And so, let us not tire – but let us remain committed to whatever is necessary for us to chart the way forward for Singapore.

Thank you. Order. Questions for Oral Answer.

1 Ms Jessica Tan Soon Neo asked the Minister for Manpower in light of the need to attract top global talent for key sectors in Singapore (a) whether there are initiatives to bring top overseas Singaporean talent back to Singapore; (b) what is the success rate in attracting top overseas Singaporeans to relocate and work in key sectors in Singapore; and (c) whether there is support to help top overseas Singaporean talent and their families to relocate and transition back in Singapore.

2 Ms Jessica Tan Soon Neo asked the Minister for Manpower (a) what is the success rate in growing our local manpower talent for the key sectors in Singapore; and (b) whether there is data to show that Singaporeans are succeeding in getting quality jobs in these key sectors.

3 Ms Hazel Poa asked the Minister for Manpower whether the Ministry has any plans to impose personal responsibility on human resource professionals in Singapore to comply with all manpower rules and regulations, such as the Fair Consideration Framework and Complementarity Assessment Framework.

4 Mr Chua Kheng Wee Louis asked the Minister for Manpower (a) for organisations that have made job postings on the Government's MyCareersFuture portal, whether they are required to notify the Ministry on the outcome of a job posting when it is subsequently delisted or when the role is filled; (b) if so, do the numbers suggest that ample efforts have been made to give fair consideration to local candidates; and (c) if not, why not.

5 Mr Chua Kheng Wee Louis asked the Minister for Manpower (a) in the last five years, what is the number of instances where organisations have been found to have placed job advertisements without fairly considering applicants, violating the Fair Consideration Framework; and (b) what is the range of regulatory actions taken against such organisations.

6 Mr Gerald Giam Yean Song asked the Minister for Manpower whether there are plans to review the Employment Pass (EP) scheme to introduce a new dependency ratio ceiling for the bottom half of income earners among EP holders to encourage employers to enhance their Singaporean workforce by hiring and training more Singaporean talent and transferring skills from their foreign employees to the local workforce.

7 Mr Yip Hon Weng asked the Minister for Manpower (a) how many companies have been placed under the Tripartite Alliance for Fair and Progressive Employment Practices’ watchlist in 2021 due to possible breaches of the Fair Consideration Framework (FCF); (b) among those on the watchlist, how many have been found to have breached the FCF and debarred from hiring foreign workers and renewing their foreign workers’ work passes; and (c) how are employment agencies that breach the FCF dealt with.

8 Mr Liang Eng Hwa asked the Minister for Manpower (a) in the past five years, how many Employment Pass (EP) holders have been employed in the technology and non-technology related industries respectively; and (b) whether useful information can be drawn from the number of EPs issued relative to the areas of skill and expectation mismatches and biasness in hiring practices.

Mr Speaker, Sir. May I have your permission to take Question Nos 1 to 8 in today's Order Paper together?

Yes, please.

Members of the House, I delivered a Ministerial Statement last month on “Strengthening Singapore’s Position as a Global Hub for Talent”. In the Statement, I outlined how we intend to strengthen Singapore’s position as a global hub for talent and addressed questions around the enhancement of our work pass framework, including the introduction of the Overseas Networks & Expertise (ONE) Pass.

Members have subsequently filed a number of Parliamentary Questions on three related issues. First, on how we ensure a complementary foreign workforce. Second, on our concurrent efforts to develop our local talent pipeline. And last but not least, on our efforts to safeguard fair consideration. I am taking them together, so that we can address the issues more holistically. I will address questions which are more technical in nature on specific policies separately.

First and foremost, ensuring a complementary foreign workforce. Members in this House generally acknowledge the need to attract top talent, as per the intent of the ONE Pass. Some Members have, however, raised questions on our broader foreign workforce policy.

At the Employment Pass (EP) level, we focus on ensuring that the EP holders are of good quality. And we do not impose quotas. To answer Mr Gerald Giam’s question on whether there are plans to review the EP framework to introduce a quota for the bottom half of income earners among EP holders, we have explained our rationale before – doing so will restrict our ability to compete and hold our companies back.

Our emphasis on quality was reinforced when the Ministry of Manpower (MOM) announced significant adjustments to our EP framework at this year’s Committee of Supply debate. First, to benchmark the EP qualifying salary to the top one-third of our local Professionals, Managers, Executives and Technicians (PMETs) workforce. And second, to introduce a new points-based Complementarity Assessment Framework (COMPASS) from 1 September 2023 to holistically evaluate EP applications for complementarity. Companies whose candidates cannot meet the EP qualifying salary or pass COMPASS will have to apply for an S Pass instead, where they will be subject to a quota.

This is a neater solution than what Mr Giam is suggesting. Compared to his suggestion where some EP holders are subjected to a quota while others are not, our current approach has the merit of keeping the positioning and criteria of each pass type clear, and overall work pass framework simpler for businesses.

Being open and connected and bringing in complementary global talent have helped to grow the overall pie for Singapore and more good job opportunities for locals.

Ms Jessica Tan asked if there is data to show that Singaporeans are succeeding in getting quality jobs in key sectors. At the same time, Mr Liang Eng Hwa asked about the number of EP holders in the Information and Communications sector, compared to other sectors.

The Information and Communications sector has been a fast-growing one and is a sector that is facing talent shortages worldwide. In Singapore and elsewhere, employers have had to tap into the global marketplace for skills in shortages. In 2021, the ICT sector accounts for one-fifth of our EP stock. This has increased from one-sixth in 2016, thus reflecting the growing digital needs of our economy. The growth of the Information and Communications sector has also resulted in creation of more jobs for our locals – in the same timeframe, we saw strong growth in the number of local PMETs by 34,400. Median local wages in the sector also continue to increase. Therefore, we can see quite clearly that it is not a zero-sum game.

At the macro level, the data is also encouraging. There are more locals in higher-skilled PMET jobs. The proportion of resident workers in PMET jobs increased from 55% in 2016 to 62% in 2021. Across the board, local workers have experienced sustained wage growth. The median income of full-time employed residents has grown from $4,100 to $4,700 over the same period, an increase of 2.1% per annum in real terms. We have also seen improved job quality and better wages at the lower end, with the income of full-time employed residents at the 20th percentile increasing 2.7% per annum in real terms over the same period.

Mr Leong Mun Wai also filed a question in a subsequent Sitting specifically on local postgraduates, a group that is very likely to be taking up or even creating these high-quality roles. Their average unemployment rate has remained lower than that of all locals over the past five years.

We have managed to create good employment outcomes because we continue to be an attractive place for companies to do business. By combining and complementing local and foreign expertise, we can attract more investments and create many more good job and career choices for Singaporeans. Conversely, if companies do not have access to the complementary foreign manpower that they need, they may exit Singapore and take the jobs they create for Singaporeans with them. When it comes to foreign workforce policies, the way to advance is to strike a very careful and delicate balance.

Next, on developing our local talent pool and workforce. Local talent development already happens organically in tandem with economic growth. As businesses expand their investments here, they will need to find manpower to fill various roles and invest in training and upgrading their workers. By working in leading firms and alongside global talent, our local workers will also gain exposure to new ideas and best practices from around the world.

The Government and tripartite partners help to catalyse this process. We work with industry stakeholders to chart out transformation plans across 23 sectors through the Industry Transformation Maps (ITMs), which include strategies to prepare our workers for higher value-added jobs in each sector.

We have also put in place a whole eco-system of programmes and schemes which businesses can tap on to prepare their workers for jobs of the future. For instance, we recommend that companies work with NTUC to set up Company Training Committees (CTCs) to help drive business transformation and training plans – the Government has set aside a $70 million budget for the NTUC CTC grant. Employers can also tap on subsidised industry-relevant training courses and reskilling programmes for mid-career workers. This includes Workforce Singapore (WSG)’s Career Conversion Programmes (CCPs).

Ms Mariam Jaafar1 filed a question for a later Sitting on how work experience and other certifications are considered aside from formal academic qualifications in eligibility requirements for CCPs. For some CCPs, academic requirements are put in place to ensure that the trainee is able to cope with the training, particularly where the training is very technical in nature. Applicants who do not meet the academic requirements may still be accepted into the programme if they have relevant alternative qualifications or work experience.

Ms Jessica Tan also asked about our initiatives to bring back top overseas Singaporean talent. Overseas Singaporeans, who have developed the ability to thrive in a global environment or who have gained industry-relevant experience and built extensive networks, can make significant contributions to our economy and pass on their knowledge to other Singaporean talent.

Fundamentally, strengthening Singapore’s position as a global hub for talent which is brimming with exciting opportunities is self-reinforcing – it will help to bring back overseas Singaporeans who are keen to contribute and to be a part of this ecosystem. The Government actively engages overseas Singaporeans to keep them connected to home, so that they can make an informed decision about whether and when to return to Singapore.

The Singapore Global Network (SGN) within the Economic Development Board (EDB) plays a key role in broadening and deepening our overseas Singaporean network through digital engagement, as well as partnerships with private, public and community organisations to deliver engagement initiatives, such as networking and community events. These engagements also allow overseas Singaporeans to serve as our valuable connectors and ambassadors in overseas markets, helping to spread Singapore's good reputation.

For returning Singaporeans, SGN and other agencies offer a variety of online resources to facilitate a smooth transition, including information on education, working and living, as well as relocating back home to Singapore. For example, the Ministry of Education (MOE)'s website contains information about school admissions for returning Singaporean children.

Lastly, on fair consideration. There is no place for discrimination in Singapore. MOM does not and will not tolerate unfair hiring practices and employers who do not give locals a fair chance will face stiff penalties. The Fair Consideration Framework (FCF) sets out requirements for all employers to consider local workers fairly for job opportunities. Work is now underway to enshrine this in legislation.

Mr Yip Hon Weng asked about the number of companies placed on the FCF watchlist. Firms are placed on the FCF watchlist if they have an exceptionally high share of foreign PMETs compared to their industry peers, or a high concentration of a single foreign nationality source.

But, Members of the House, let me reiterate this. Firms placed on the FCF watchlist have not flouted any rules. Instead, what the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) does is to engage these companies to help them improve their workforce profiles. Since 2016, MOM has engaged a total of more than 1,700 employers under FCF.

One other limb of FCF is the job advertising requirement. Employers must first advertise on MyCareersFuture (MCF) and fairly consider all candidates, before submitting an EP or S Pass application. Mr Louis Chua asked whether companies need to notify MOM on the outcome of a job posting when it is subsequently delisted or when the role is filled. We do not require companies to do so, just like how they also do not need to do so for other job portals. We are conscious of the fact that we should not add administrative burden and make it onerous for employers to use MCF.

While the number of cases of discriminatory practices is small, MOM will continue to remain vigilant. Besides investigating complaints lodged with TAFEP, we will also use data analytics to identify suspicious cases for further investigation. And where employers are found to be discriminatory, MOM will not hesitate to take action against such employers.

In response to Mr Louis Chua and Mr Yip Hon Weng's questions, from 2017 to 2021, MOM took enforcement actions against approximately 300 companies. The regulatory actions included issuance of warning and being barred from hiring or renewing foreign workers.

Ms Hazel Poa also asked whether MOM intends to impose personal responsibility on human resource (HR) professionals in Singapore to comply with all manpower rules and regulations. I would like to remind Ms Poa that hiring decisions are not made by HR professionals alone. Senior management as well as line managers are also involved in these hiring decisions.

Today, MOM can take action against culpable individuals and decision-makers for non-compliance of MOM's rules and regulations. This includes HR professionals as well as business leaders. Employers, business leaders and HR professionals all play an important role in ensuring that their companies' employment practices are fair and that they comply with regulations and the Tripartite Guidelines. All employers in Singapore must comply with not just the letter but with the spirit of our laws and regulations on fair hiring, and adopt good HR practices.

The responsibility placed on employers as well as decision makers to uphold workplace fairness is also being discussed by the Tripartite Committee, which is deliberating the scope and design of workplace fairness legislation. Beyond enforcement, we must also enable and equip HR professionals to better support their companies.

Mr Speaker, Sir, in summary, we have a three-pronged strategy to support good employment outcomes: first, to safeguard the complementarity of our foreign workforce; second, to invest in developing our local workforce; and third, to ensure fair consideration for locals.

All our Government policies, all of our schemes as well as programmes, work together to achieve one goal – to create opportunities for locals, at all and every level of the workforce. I thank Members for their questions and I assure them that MOM will continue to update our suite of policies regularly and in line with this objective.

Ms Jessica Tan.

Thank you, Mr Speaker. I thank the Minister for his comprehensive answer but I do have two supplementary questions. One is with regards to the quality of jobs. Minister shared about the make-up of Singaporeans and residents and our workers in Singapore, in terms of the PMET jobs. Could he also share if there is any data, in that same vein, for leadership roles as the development has happened of Singaporeans taking up professional leadership roles in these sectors?

The other supplementary question I have – it is very heartening to hear about the outreach on SGN and keeping in contact with Singaporeans overseas. Specifically, with regards to top talent for the key sectors that we are focusing on, what specific actions or initiatives are being done to engage and attract top talent back to Singapore to be able to fill those key positions, as we look at attracting foreign talents and specific support to their families in terms of transitioning, especially if they have non-Singaporeans as spouses?

I thank Ms Jessica Tan for her supplementary questions. On the leadership roles, we do not have the data available at hand today. Perhaps, if Ms Tan could file a Parliamentary Question (PQ), we will try and get some of those data. But, if you look at the proxy, if we use the $30,000 salary criteria of the ONE Pass mentioned at the last Parliamentary Sitting and given the fact that if you use the proportion of about 7,000 to 8,000 current EP holders who are at that level or above, a significant majority who have gone above that level are our Singaporeans. So, perhaps, that would give you some form of a broad macro indicator, if you take that as a proxy. But, like I said, it may not necessarily be an accurate proxy.

For the top talent in many of these key sectors that we talked about, we have a significant number of initiatives that we have put in place to try to bring them back. While I agree with Ms Jessica Tan that returning top Singaporean talent can make significant contributions to our economy back home, where they are in today, in many of the tier one cities all over the world, they can also serve as valuable connectors and advocates in many of these overseas markets while they continue to gain the networks, the expertise and the industry relevant experiences abroad. Many of them actually chose to carry on staying for longer periods because they have got other ties, work commitments, maybe friends and schools.

The initiatives that we have started, I could give you a few examples. One, is the Singapore Financial Forum (SGFF). It is co-organised by the Institute of Banking and Finance (IBF), SGN and the Monetary Authority of Singapore (MAS). We held the inaugural forum in May 2022. It was a two-day event featuring insights from industry leaders on key growth areas and career opportunities in Singapore's financial centre. The people who attended felt that it was a very good forum for them to communicate and also for them to consider relocating back home and included fireside chat with industry leaders on their overseas experiences and relocation journeys as well.

Other agencies, like the National Research Foundation (NRF), also runs the Returning Singaporean Scientist Scheme (RSSS). This seeks to attract outstanding overseas based Singaporean research leaders back to Singapore to take up leadership positions in our universities and our research institutions. NRF has been engaging our Institutes of Higher Learning (IHLs) as well as the Agency for Science, Technology and Research (A*STAR) to identify some of these suitable candidates. These are just some examples.

Mr Gerald Giam.

Sir, since the Ministry is not imposing any quotas on Employment Pass holders, would it consider fixed-term EPs which cannot be renewed once they expire? This way employers can be incentivised to hire and train Singaporeans to fill those positions when the EP expires and there will be more knowledge and skills transferred to Singaporeans. This is a proposal that the Member for Aljunied Group Representation Constituency (GRC) Leon Perera raised in October 2020.

Second, with the COMPASS framework, a candidate can attain a passing score even with zero points on the diversity criterion, which in any case is quite low because it looks only at the share of the candidates' own nationality among the firm's PMETs. Can MOM tighten the COMPASS framework to require the candidate to obtain at least 10 points for each of the four foundational criteria and a minimum of 50 points overall? This will ensure that companies give consideration to all the criteria and ensure a more level playing field for Singaporean PMETs during the hiring process.

I thank Mr Giam for his two questions. First, on the Employment Pass, we have earlier on said that there is no fixed-term EP. In fact, the EP holders for these companies, they do not enjoy an automatic renewal for these EP holders. There is a certain validity and some of them are on a two-year term, some are on a one-year term and subject to companies renewing them, subject to other criteria, these EPs are not automatically renewed. I think these are important points to take note of.

As far as the COMPASS framework is concerned, we are starting from 1 September 2023. We are reviewing and getting feedback still from the industry. I am looking at some of the criteria to see how we can nuance it to make sure that not only is it business-friendly, but that they can continue to help us achieve our desired end game of levelling up the opportunities for our Singaporeans.

Today, we are in a very tight labour market. Any introduction of any new policy to nuance this framework would be viewed as further tightening. So, I hope the Member understands the delicate situation and the fine balance that we are in.

We have today, very clear foundational criteria. Two of the characteristics pertain to the individual characteristics; and two, relate to the firm. I think it is sufficient for now to move ahead with this framework and let it run.

Mr Yip Hon Weng.

Thank you, Mr Speaker. I thank the Minister for his reply. I have two supplementary questions. Does MOM have investigatory powers to ascertain whether a company did the FCF job advertising in bad faith? For example, whether a company has already decided on a foreign candidate beforehand? My second supplementary question is, whether MOM will consider calibrating the FCF or watchlist into tiers, with a specific tier where firms are named and identified.

I thank Mr Yip for his two supplementary questions. As I have shared earlier on, MOM today has various tools, including data analytics to look into firms, which hire in bad faith. I would not be able to share at length or in-depth what some of these predictive analytics are, because by sharing them, we then got to keep inventing newer and better AI tools to identify them.

Today, the vast majority of the firms under the FCF watchlist, when we work with them to improve some of their hiring practices and policies, the majority of them end up exiting the watchlist. From the data of such policies that are available today, do not seem to indicate that this is a pervasive problem. There will always be outliers but because the core of what we do is to improve and level up opportunities for our local Singaporean Core, we will continue to nuance our approach to these films.

Mr Pritam Singh.

Thank you, Mr Speaker. Just one question for the Minister. I refer to the Minister's earlier reply, specifically where he mentioned that companies on the FCF have not actually flouted any rules. In view of the Ministry's newly-introduced COMPASS, where diversity is listed as a firm related attribute in considering EP applicants, how significant in the Minister's opinion, would this new criterion be in reducing the number of companies on the FCF watchlist over time?

I thank the Leader of the Opposition for that question. COMPASS will come into implementation on 1 September 2023. Within COMPASS, there are four criteria. As I have said earlier on, two of the criteria relate to the individual and two of the criteria relate to the firm.

Because it is almost a set of interlocking gear, whatever you move in one criterion will affect the rest. Our sense today is that, in the run-up to implementing COMPASS and as we engaged more firms, we get feedback that this is a good framework which helps to differentiate our workforce. It also allows us to review from time to time, how we can be more responsive to the type of jobs and the type of talent our country and our economy needs. So, directionally, COMPASS is a move in the right direction because it allows us a very differentiated strategy.

Mr Louis Chua.

Thank you, Speaker. I only have one supplementary question. I note from the Minister's response on the use of data analytics. Just wondering if the Minister can share with us in terms of the data points that are being collected from companies which make an EP application, to show that they have failed to source for a local candidate after the 14-day or 28-day period, despite their best efforts. Then, the MOM side can also satisfy itself that this is truly the case for these companies.

I thank Mr Louis Chua for his question. MOM would rely on multiple data points to allow us to triangulate. This will vary across the different sectors that we are dealing with.

One key point that we will consider, obviously, is how acutely short, in terms of the talent that is needed for one particular sector, whether it is in deep tech. And given the shortage, that is one data point that we would use to consider in terms of our data analytics.

There is no one-size-fits-all. So, today, if you look at the outcome, which is a very low long-term unemployment rate, for us to ensure that in a tight labour market, companies can continue to do well, to be able to have access to the manpower that they need to run the operations, we work very closely with them. In the process of working with them, we also identify certain characteristics and behaviour that allow us to develop these analytics. I hope that gives Members a broad perspective of what we are doing.

Ms Hazal Poa.

I thank the Minister for his reply. The Minister mentioned earlier that they can already take action on individuals for non-compliance. Can the Minister elaborate on what kind of actions can be taken on these individuals? And which legislation is this power conferred under?

I thank Ms Poa for her question. Today, MOM works very closely with the Institute for HR Professionals (IHRP), as well as our tripartite partners and employees to professionalise the HR workforce and to strengthen HR practices and capabilities.

One key effort is the IHRP certification, which recognises the level of skills and experience of HR professionals. Incumbent within the process certification, it assesses the knowledge and the understanding of our employment legislation and regulations, including FCF well as the soon to be implemented COMPASS.

I do not want to go too much into the details of that training. All certified HR professionals must comply with the IHRP's code of professional conduct. If the HR professional has been found to have breached manpower rules and regulations, IHRP may subject the HR professional to corrective actions, such as counselling by senior certified professionals. They can also suspend the certification or permanently bar the individual from being certified, depending on the severity of the breach.

In addition, MOM can also prosecute errant employers or key personnel who make false declarations that they have considered all candidates fairly. Employers who are convicted of false declaration under the Employment of Foreign Manpower Act will face imprisonment of up to two years or fine of up to $20,000, or both.

Ms Mariam Jaafar.

I thank the Minister for his response to my PQ. Just one supplementary question – as we consider the criteria for which people without the academic qualifications may yet qualify for the career conversion programmes, who would be the regulator for that? Would that be SkillsFuture Singapore or would it be dependent on the administrator of the programme? And how can we make sure that in a world where more and more people are going for certifications and training, that these are not cast aside when they apply for career conversion programmes or even jobs?

I thank Ms Mariam Jaafar for her question. Members of the House and Ms Mariam Jaafar would appreciate the wide diaspora of jobs and skillsets that are needed to fulfil the roles. There will be very, very clear cut roles, which would require say, understanding of arithmetic, or even physics. Because safety of certain work process is needed.

I recently dealt with an appeal, filed by a Member here, appealing for a particular resident to be given an exemption from having to pass certain tests. But because this pertains to workplace safety where a basic understanding of the calculation of the weight-bearing nature of certain platforms and tensile strength of the rope is necessary. So, a basic understanding of physics is therefore needed. That could not be substituted by just experience or some other alternative qualifications.

In that kind of setting, MOM will come in to work with the individual to see whether we can help the person pass these basic requirements. And if not, try to find an alternative role to place the person in.

So, I guess the very long answer to the Member's question is that it is very difficult for us to be able to substitute away every single skill by an alternative qualification. I beg her indulgence; I hope she understands.

9 Mr Ang Wei Neng asked the Deputy Prime Minister and Minister for Finance in light of persistent high inflation rates in the last few months, whether the Ministry will consider (i) bringing the distribution of CDC Vouchers forward to the third quarter of 2022 instead of January 2023 and (ii) issuing $100 CDC Vouchers to every Singaporean aged more than 21 years old instead of to each household.

Mr Speaker, to help Singaporean households with their daily expenses, the Government has disbursed two sets of CDC Vouchers worth $100 each in December 2021 and May 2022. These vouchers can be used at over 18,000 participating heartland merchants and hawkers until the end of this year.

The vouchers have been well utilised. As of September 2022, about 97% and 87% of Singaporean households have claimed their December 2021 and May 2022 CDC Vouchers respectively. These households have utilised $180 million, which is about 80% of the total vouchers available to them.

Besides the CDC Vouchers, we have a mix of support measures given at the household and individual levels to help Singaporeans cope with inflation and cost of living concerns, with more help given to the lower-income and vulnerable groups. This financial year, a low-income couple with two young children living in a 3-room HDB flat can expect to receive about $3,700 in various forms of support, such as cash, education top-ups, utilities and Service & Conservancy Charges (S&CC) rebates, and CDC Vouchers.

The Government understands Singaporeans’ concerns over rising prices. We are carefully monitoring the situation and will consider if there is a need to provide more assistance, or bring forward some of the support schemes, especially if the situation worsens further.

Mr Ang Wei Neng.

Thank you, Speaker. I thank the Senior Minister of State for the comprehensive reply. I have postponed this Parliamentary Question (PQ) three times since July this year and for the past three months, inflation rate has been gaining momentum and breaking records month after month. It is now 5.1% in August, the highest in 14 years. We understand that Deputy Prime Minister Lawrence Wong has repeatedly said that the Government is prepared to do more if the inflation is persistently high. And now, we are experiencing this phenomenon.

I think the Senior Minister of State will agree that households with a bigger number of people face more challenging headwinds in this high inflation environment compared to households with lesser members. So, would the Government consider giving more CDC vouchers to bigger households as compared to smaller households?

Also, the second part of my question is, will the Government consider giving the CDC Vouchers to individual Singaporeans, rather than one per household?

And lastly, what else will the Government consider doing, given that inflation has been consistent for the past few months since the last announcement by Deputy Prime Minister Lawrence Wong in May to give more help to Singaporeans?

A reminder to Members. Please do keep your supplementary questions short and not inflate it.

Mr Speaker, the Government has been rolling out different measures to help Singaporean families and individuals, and these include measures that were previously announced during Budget 2022 and during the June announcement where we launched a $1.5 billion package to support Singaporeans. So, some of these measures are still being implemented, are still being rolled out.

But as I mentioned in my reply, we are closely monitoring the situation and if it is necessary for us to provide more support, we are prepared to do so.

Mr Speaker, CDC Vouchers are a very useful part of the support package but they form part of the overall assistance package from the Government. Besides CDC Vouchers, there are also many other schemes to help Singaporeans to cushion the impact of rising prices, such as additional U-Save rebates and Household Utilities Credit. We give Edusave and Child Development Account top-ups, and also public transport vouchers, just to name a few examples.

We also provide additional GST-Voucher cash payments of up to $300 to eligible Singaporeans, aged 21 and above. So, this is not household, this is to individuals, to eligible Singaporeans, aged 21 and above. These are targeted to provide more assistance to lower-income Singaporeans, which, I think, is a better and more effective way compared to giving everybody $100 of CDC Vouchers, regardless of their wealth and income levels.

Because we know, given limited resources, it is correct to channel more funding to help our lower-income and vulnerable Singaporeans because they are more affected by rising prices. But at the same time, we do have broad-based schemes, like CDC Vouchers and Household Utilities Credits, which we will give to all households to provide some help, to help them to cushion the impact of high inflation.

10 Dr Wan Rizal asked the Minister for Health in light of the recent report regarding the administering of undiluted COVID-19 vaccines, what are the safeguards in place to prevent similar situations from occurring in the future.

11 Ms Joan Pereira asked the Minister for Health what measures are taken to ensure that doctors, nurses and other healthcare professionals who work part-time, or as locum on a freelance basis, are kept up-to-date on the latest developments in healthcare and are adequately trained and familiarised with clinical practices.

Mr Speaker, may I please have your permission to answer Question Nos 10 and 11 on today's Order Paper?

Yes, please.

Sir, my response will also cover matters raised in Parliamentary Questions filed by Mr Gerald Giam1,2, scheduled for a subsequent Sitting, on 4 October 2022. I invite the Member to seek clarifications today and consider withdrawing his questions if it is adequately answered.

Sir, there are professional and statutory requirements for the provision of healthcare. All healthcare professionals are expected to be competent in providing safe and good quality care. Licensees of healthcare institutions also bear a responsibility to ensure that their staff, including part-timers or locums, are properly onboarded and adequately trained to perform the tasks that they are assigned, through establishing appropriate protocols and processes.

Professional Boards require that all registered healthcare professionals keep up-to-date on current standards of care and treatment, and participate in Continuing Professional Education (CPE) programmes or activities to renew their Practising Certificates. CPE consists of educational activities that serve to maintain or increase the knowledge, skills and professional performance of healthcare professionals.

All COVID-19 vaccination providers under the National Vaccination Programme (NVP) are licensed and regulated by the Ministry of Health (MOH). Specifically, for COVID-19 vaccination, we issued additional regulations to stipulate the prevailing eligibility criteria, the dilution and administration of the recommended dosage for each vaccine, the management of emergencies and incident reporting. Vaccination providers are expected to assess their staff competencies in COVID-19 vaccination administration.

In the event of any vaccine administration errors and medical emergencies following vaccination, the vaccination providers are required to report to MOH no later than three hours after the incident. The providers are also required to inform the patients immediately when a vaccination error has occurred, provide appropriate immediate care and then, monitor the patients' health with daily calls for the next seven days to ensure their well-being. In the event of an error, MOH will investigate. And if there are any systemic issues, we will work with the providers to review and improve their work processes.

MOH is currently investigating ProHealth Medical Group about the incident on 15 September 2022 and will take appropriate enforcement actions if there are any regulatory breaches. As of 26 September 2022, out of approximately 16 million doses of COVID-19 vaccines administered, there had been 11 persons affected by overdosing and 119 persons affected by underdosing of the vaccinations. Of these, seven were children, aged between five and 11, who did not have any adverse reactions. The adults had either no adverse reactions or recovered uneventfully.

Mr Gerald Giam.

Mr Speaker, these incidents occurred in the clinic in Bedok Reservoir-Punggol ward of Aljunied Group Representation Constituency (GRC), so I am naturally quite concerned about this. The incidents occurred on 15 September 2022, but MOH was only alerted on 19 September 2022, a four-day delay. I am concerned that a crucial window of time, where emergency actions need to be taken may be lost if there is a delay in reporting such incidents.

The Senior Minister of State said just now that they must report no more than three hours after an incident happens. So, clearly, there must be something that MOH will be investigating. Can I ask the Minister how soon must clinics notify the affected patients and extend emergency assistance to them and are there any penalties for non-reporting or late reporting?

Sir, I thank Mr Gerald Giam for the questions. The patient should be notified as soon as the care provider knows that there is an error. That would be a reasonable expectation because the patient should then be directed for immediate care following on from the error. And that is going to require the informed consent of the patient. They need to know why they are perhaps under observation or required to attend an emergency department.

He asked about the penalties for late reporting to MOH. It would depend on the circumstances and reasons, and who it was that perhaps knew, but did not report. So, as the matter is still under investigation, it would be premature for me to comment.

Dr Wan Rizal.

Thank you, Mr Speaker. And I thank the Senior Minister of State for the reply. My concern is more for the children, the elderly and the vulnerable groups. Given that this breach has happened, I would ask whether in this review process that is going on, will MOH be providing more stringent processes to ensure their safety and, of course, make sure that this does not happen again in the future?

Sir, I thank Dr Wan Rizal for the question about the stringency of the processes. Sir, I would reiterate that these processes are part of the healthcare licensee expectations, the regulations that we have for the administration of a wide variety of drugs and vaccines. We will indeed be reviewing this licensee, this clinic, as well as the personnel that are involved.

The vast majority of the clinics and vaccine providers do a great job of ensuring that the patients are cared for safely, the vaccines are provided safely, with the correct dosage.

And so, I think we have to identify, first of all, whether this is an issue with an individual member or personnel, whether it is something about the processes at the site or whether it is something systemic about the overall vaccination process. All our data, so far, suggests that the last is not likely – the vast majority of our doses have been delivered quite safely. Nevertheless, MOH continues to review all of this.

12 Mr Ang Wei Neng asked the Deputy Prime Minister and Minister for Finance whether he can provide an update on the progress of the Forward Singapore exercise and the plans ahead.

Mr Speaker, Forward Singapore is an exercise to refresh our social compact for Singapore's next bound of development. This involves reviewing our existing assumptions and ideas on making Singapore a better home for our people, to see whether they remain valid. It also involves generating new ideas and policy thinking to address our challenges and seize new opportunities.

Since we launched the exercise in June, the response from Singaporeans in the many conversations with the 4G leadership team has been encouraging. We have received, from Singaporeans, many useful insights for policy formulations, suggestions of solutions and offers for action, all of which will help us build a better and stronger Singapore together.

We have been working on three broad themes: how to create more opportunities for Singapore and Singaporeans; how to provide better assurances for Singaporeans in a more uncertain future; and how to strengthen our sense of solidarity as one people.

Besides these three themes, we are also deliberating over the shared responsibilities that individual Singaporeans, families, communities and companies, should uphold as part of the refreshed compact, so that we can better tackle the challenges ahead and seize new opportunities for Singapore and for our people.

Over the next few months, we will deepen our conversations and partnerships with Singaporeans. We intend to do so in two ways.

First, there will be more engagements for people to offer their own views and ideas, as well as to hear from others. These will span a wide range of topics, such as how to strengthen employability and create good jobs, make our living environment even better, strengthen our bonds to Singapore and with one another, and environmental sustainability, amongst others.

Some of these engagements will be held in our neighbourhoods and some in vernacular languages and different formats to better reach out to Singaporeans of different needs and preferences. These engagements will allow us to reflect on our values today and what we aspire to be in the future. They will sensitise us to the choices we have to make as a people, for ourselves, as well as the longer-term interest of future generations.

Second, we will invite people to go beyond just giving views, to also co-develop and implement solutions and policies together with the Government. For example, approaches like Citizens' Panels and Alliances for Action (AfA) bring people together to deliberate on issues they feel strongly about and, after robust discussions with one another and experts, recommend policy ideas to the Government. Through AfA, stakeholders can also come together to take direct action in designing and implementing solutions.

I welcome members of the public and organisations to register their interest to participate in these sessions through the Forward Singapore website. We plan to complete the exercise by the middle of next year. We hope to partner Singaporeans from all walks of life for this Forward Singapore exercise because everyone has a role to play, to build a better Singapore for all.

Mr Ang Wei Neng.

Thank you, Speaker, Sir. I thank Deputy Prime Minister Lawrence Wong for the comprehensive reply. We are very heartened to see that the Forward Singapore exercise is gaining momentum. I have two supplementary questions.

One, I would like to ask Deputy Prime Minister Wong whether the issue of repealing section 377A of the Penal Code will be discussed at a Forward Singapore exercise before it is tabled at Parliament.

Secondly, I would like to ask Deputy Prime Minister Wong whether the Government will consider issuing a White Paper to summarise the views of Singaporeans, the feedback and the Government's responses after the end of this exercise.

And meanwhile, I also hope that the Government will not issue any major White Paper before the end of this exercise. But, to be sure, I am not referring to the Healthier Singapore White Paper that we will discuss tomorrow.

Sir, the conversations and engagements around section 377A had started earlier, even before we started the Forward Singapore exercise. And it was a result of these engagements and conversations that led to the Government's announcement of what it hopes to do at the National Day Rally this year. So, we do not intend for section 377A and the issues around it to be a key part of our Forward Singapore platform, because these started after the conversations had already begun.

But, of course, if there are views around society and our values and Singaporeans feedback this to us through our engagements and conversations, we will take in all of the feedback as part of the Forward Singapore engagements.

Second, on the process and what we will do to put down and publish the conversations that we had with Singaporeans – whether it is a White Paper or whether there are other platforms – we will review and study what are the suitable platforms. We will not rule out having some mid-term milestones where we might very well decide to compile, consolidate some of the feedback and respond to them earlier, even before the end of the exercise.

For example, we have the Budget next year. So, when we engage Singaporeans through Forward Singapore over the course of the next few months, we might very well use the Budget next year as an interim milestone where we can compile the views and feedback from people and then respond to them with some announcements without having to wait all the way till the end of the exercise.

But, certainly, by the completion of the exercise, we will find suitable platforms in which we can pool together all the feedback, suggestions and ideas we have collated and make sure that these are adequately surfaced through appropriate means.

13 Dr Tan Wu Meng asked the Minister for Health (a) whether there will be a continued, further and deeper study of excess mortality from the COVID-19 pandemic including the impact of COVID-19's long-term effects and how this may contribute to excess mortality; and (b) what is being done to identify potentially preventable causes of excess mortality.

Mr Speaker, Sir, my response today will also address the question filed by Mr Yip Hon Weng1 which is scheduled for a subsequent Sitting.

The COVID-19 pandemic has posed a severe dilemma – summarised as lives versus livelihoods – for all regions in the world. When you close the borders and lock down society, you can save lives, but people will suffer tremendously from economic paralysis and children held back, perhaps permanently, in their learning. When you open up society and the economy to resume normalcy quickly, many people will suffer from falling severely ill and die from infections.

Every region in the world knows it has to strike a very careful balance between lives and livelihoods. Three years into the pandemic, Singapore has been able to open up our society and economy, with life almost going back to normal and yet we maintain an excess mortality rate that is one of the lowest in the world.

In September 2022, the Ministry of Health (MOH) released a public report on the excess deaths in the Singapore resident population over the pandemic. Between January 2020 and June 2022, there was an increase of 24.9 deaths per 100,000 persons per year, using the pre-COVID-19 year of 2019 as the baseline. So, our death rate during this pandemic, essentially, took us back to 2018 levels, wiping out improvements over a few years.

The World Health Organization (WHO) uses a slightly different methodology to compute excess deaths, but the results are similar. Based on WHO's estimates for the years 2020 and 2021, Singapore experienced 26 excess deaths per 100,000 persons per year, compared to our estimate, which was 24.

9. It is about the same. But it is still, again, much lower than many countries, especially those that have opened up like us.

Members have asked for a breakdown of the numbers by year. So, if we break up our estimated excess deaths, there were 1,140 from January 2020 to December 2021 and 1,350 from January to June 2022 respectively.

There are two key ways to reduce excess deaths associated with the COVID-19 pandemic. The first is vaccination.

COVID-19 vaccination plays a big part because it significantly reduces the risk that infections translate into severe illness and deaths. The fact that Singapore got 93% of its population vaccinated – and that base includes children who are not eligible – and 80% boosted, is a key reason why we have low excess deaths.

To answer Mr Yip Hon Weng's question, which has been scheduled for another Sitting, in the same vein, in Singapore and elsewhere in the world, unvaccinated persons disproportionately contributed to COVID-19 deaths. In the first half of 2022, about 5% of the eligible population are not fully vaccinated, but they contributed to 28% of COVID-19 deaths.

MOH does not comprehensively track the number of persons who are medically ineligible for COVID-19 vaccinations. However, as at 30 June this year, the number of persons who applied to be exempted from vaccination-differentiated safe management measures (VDS), claimed they have adverse reactions to COVID-19 vaccines and we have looked at them and have granted 2,100 such exemptions.

For this group, the observed rate of COVID-19 deaths in these individuals was about two in 1,000, compared to 0.3 in 1,000 observed in the whole population. Again, this is the group which applied to be exempted from VDS. In reality, the number of people who are medically ineligible for COVID-19 vaccines is small, given the choice of vaccines that they have access to.

It is worth reiterating here that, to be properly protected against the Omicron virus of COVID-19, we need to get a booster, in other words, three doses of mRNA vaccines. It will reduce the risk of severe illnesses and deaths significantly. Two shots do not do the job properly. We are currently bringing in the updated bivalent vaccines that can offer better protection against variants.

The second factor is whether the healthcare system had been overwhelmed at any point during the pandemic – the second factor for excess deaths. "Overwhelme" is not the same as hospitals being very busy, which ours have been and are still very busy. "Overwhelme" means there were so many severely ill COVID-19 patients that the hospitals ran out of beds, oxygen and medical staff to take care of them. Patients are, essentially, left to demise. Whenever a bed or an equipment becomes available, doctors have the unenviable task of choosing whom they should save amongst everyone that is waiting.

When that happens, many non-COVID-19 patients, such as those with heart attacks, injuries, strokes will be affected and, without proper care, many of them will also die. And that happened in many countries.

In Singapore, we did not let that happen, mostly because when there was a risk of that happening, we went into the circuit breaker mode or the heightened alert mode to slow down the rate of infection to protect our healthcare system. Hence, throughout the pandemic, despite our public hospitals being strained while coping with the pandemic, our hospital and ICU beds were able to support patients with urgent medical needs.

Looking ahead, we can continue to prevent deaths by preserving healthcare capacity and ensuring that our healthcare workers are well-resourced in such situations. If and when there is a surge in infection and severe illness numbers, we cannot rule out the re-imposition of safe management measures. But we will only do so when it is absolutely necessary to save lives and to protect the healthcare system.

What we managed to achieve is due to the fact that the great majority of our people did their part and did the right thing. The pandemic is not entirely over, but we hope we are at the end game and will continue to navigate through the crisis with resilience and unity.

Dr Tan Wu Meng.

I thank the Minister for his comprehensive answer. I have one supplementary question. Does the Government have plans to study more deeply the impact of socioeconomic status as well as housing type on the excess mortality risks from COVID-19?

I thank the Member for that suggestion. It is a good one. We have the Saw Swee Hock School of Public Health. Maybe that is something they can look into but, so far, we have not compiled those numbers. But if we look at the literature and our own experience, the two main drivers of excess deaths have been, first, are you vaccinated? Second, your age, and that will continue to be the case. Notwithstanding, it is an interesting line of enquiry which our researchers will definitely look at.

Mr Yip Hon Weng.

Thank you, Mr Speaker. I thank the Minister for his reply. I have two supplementary questions.

First, with more data, does MOH intend to periodically review the vaccination eligibility criteria to allow more people who were previously ineligible for vaccination to get vaccinated and protection from COVID-19?

Second, how does MOH intend to increase the vaccination rate, especially amongst those who are seniors and have comorbidities?

On vaccination eligibility, the question is actually the other way around. We would very much want people to be vaccinated but, usually, it is the resident who comes forward to say "I am not eligible. I have got eczema, I have this, I have that". And then some are not so valid medically; others we have to take a closer look, especially if they have some adverse reaction after their first shot and they then may become ineligible. And that is a medical indication which we will have to respect, notwithstanding the fact that we bring in different types of vaccines now with different technological platforms and, hopefully, they will be able to take one of them.

Second, how do we further increase the rate of vaccinations? We have to keep on explaining why it is beneficial to vaccinate. We have to get the momentum. Vaccination begets vaccination. When we see more of our friends and relatives vaccinated, we also, notwithstanding some hesitancy, will get vaccinated. So, we have to bring vaccinations to the community, which we are still doing through our mobile teams. And also for those who are not mobile and are stuck at home, we will go to their homes to provide the vaccination.

But, as mentioned in the House earlier, we are trying to move to a new definition of "up to date" vaccination. Today, vaccination is pretty much all covered. Whoever is holding out probably is very hesitant, unable to change their mind or, indeed, have medical contraindications and you cannot vaccinate them.

Moving forward, it is more the booster rate and we should move to a stage where we stop counting the number of boosters, such as booster one, two, three and so on, but move to a concept where we really live with the virus closer to how we live with influenza. Every year, when there is a season, take an influenza vaccination that will protect you throughout the year and we need to. As we gather more data, as we have the shipments in and operations are ready, we will announce the details and move to a new mode of vaccinating the population.

14 Mr Sharael Taha asked the Minister for Transport with the reopening of Changi Airport’s Terminal 4 and the recommencement of departure operations in the southern wing of Terminal 2 (a) what is the total number of additional manpower required to support the reopening; (b) whether the terminals are sufficiently manned to meet Singapore’s year-end air passenger traffic targets; and (c) if not, how does the Ministry ensure that there is sufficient manpower to support the ramp-up in capacity so that travellers’ experience that Changi Airport is renowned for is not affected.

15 Mr Saktiandi Supaat asked the Minister for Transport with the gradual reopening of terminals at Changi Airport (a) what percentage of its capacity is the airport operating at presently, taking into account the airport’s currently available manpower, retail services and other infrastructure; (b) what are the assumptions underlying the projection that the number of flights handled by Changi Airport will rise to 80% of pre-pandemic levels by end-2022; and (c) what concrete steps are being taken to scale up on the airport’s capacity.

Minister Iswaran, will you be taking Question Nos 14 and 15 together?

Yes, I am taking Question Nos 14 and 15 together, please, Speaker.

Air travel has recovered steadily since Singapore reopened its borders to all fully vaccinated travellers without testing or quarantine in April 2022. As of the first week of September, average weekly passenger traffic at Changi Airport has recovered to above 60% of pre-COVID-19 levels and it has held at that level steadily. The number of flights at Changi Airport has also recovered to nearly two-thirds of pre-COVID-19 levels.

The number of flights that airlines have filed to operate at Changi Airport by the year end is more than 80% of pre-COVID-19 levels. We expect this to increase further as airlines respond to demand from travellers, following the recent border-easing announcements by key travel markets such as Hong Kong, Japan and Taiwan.

To accommodate this anticipated growth in the number of passengers and flights, we reopened Terminal 4 on 13 September. We will also be commencing departure operations in the southern wing of Terminal 2 on 11 October, in addition to arrivals which had commenced on 29 May. With this, Changi Airport will have the physical capacity to accommodate up to 70 million passengers per annum, which is about 100% of the passenger traffic levels that we had pre-COVID-19. This also represents about 80% of Changi’s pre-COVID-19 capacity itself. In other words, we have used the intervening time to enhance Changi's capacity as well.

Our aviation stakeholders have been concurrently working hard to build up their workforce and train their new hires to support this ramp-up in capacity. This has been an ongoing process since early this year. The air transport sector workforce has recovered to about 80% of pre-COVID-19 levels in the first half of the year. Aviation stakeholders aim to hire another 4,000 workers between September and the end of this year. Cumulatively, this will bring us to about 90% of our pre-COVID-19 workforce. The recruitment efforts of the companies in the sector are currently on track.

And thanks to the efforts of the whole aviation community, including our regulator, the Civil Aviation Authority of Singapore (CAAS), airport operator, airlines, ground handling companies, unions and workers, Changi has managed the recovery relatively well so far. By continuing to work together as one Changi community, we are confident that Changi Airport will be ready to welcome more passengers back to Singapore and offer them the distinctive traveller experience that Changi is known for.

Mr Sharael Taha.

I thank the Minister for his reply on meeting the short-term ramp-up demands for the industry. Given that Changi Airport is our strategic asset and has still many labour-intensive components, such as baggage handling, catering and training, what lessons can be learnt and incorporated in the future Terminal 5 (T5) design and possible retrofitting of the current infrastructure? And how can we provide more support for the airport workers, such as those represented by Singapore Airport Terminal Services Workers Union (SATSWU) to upskill and improve productivity so that we can continue to improve on the renowned service of Changi Airport?

Mr Speaker, I thank the Member for his questions. Let me take the second question first.

In terms of upgrading and upskilling the workers, this is an ongoing effort. As with all other sectors in Singapore, it is a priority because, ultimately, by upskilling the workers, we enhance their productivity, enhance the competitiveness of the companies and the larger aviation sector and, of course, enable them to have good jobs with good wages. So, it is a virtuous cycle, something that we are continually working on.

The Member's first question was on areas such as baggage handling and what lessons we have learnt that can be incorporated into the T5 design.

The last two years, as Members would know, we had paused in the development of T5 because the trajectory of air travel recovery was uncertain in light of COVID-19. As was recently announced by the Prime Minister at the National Day Rally, we have restarted the design and process for T5. And the key lessons we have learnt include how we can modularise airport operations in order to enhance their resilience – in this case, our civilian airport – to such pandemic-type challenges. Because, as I think all of us would well appreciate, airports are designed for convergence of streams of passengers. And yet, when you are in a pandemic-type situation, the objective is really to separate the streams as much as we can according to their risk categorisation.

That inverts the logic of airport operations and is something that has to be factored into the design early, not just in terms of processes, but in terms of actual physical design. So, modularity and how it can help combine with processes to enhance the resilience of our airport in the face of possible pandemics in the future is one aspect.

Another aspect has been sustainability and how we can focus on ensuring that T5, but more generally all of Changi, can really lead the way as a sustainable air hub. And this is why CAAS is now working on developing a blueprint for a sustainable air hub in Singapore.

And finally, on specific areas like baggage handling which the Member raised, this is actually one of the key challenges and this is not unique to Changi. Because all over the world, baggage handling is one of the most manpower-intensive aspects of airport operations. How we are able to automate this is a key part of the work that is going on.

As I think Members can well appreciate, this is not something you can decide on a standalone basis because it is not only one airport doing this. Whatever we do has to be ultimately coordinated with airlines, aircraft design and what happens in other airports. It is a general effort that is being undertaken to see how greater automation can be brought into the handling of baggage at airports.

In fact, I was in the International Civil Aviation Organization (ICAO) Assembly earlier last week and this was one of the topics that was discussed by several of the aviation ministers. So, it is an ongoing effort and CAAS is investing in a lot of innovation work in that regard.

Mr Saktiandi Supaat.

Mr Speaker, I would like to thank the Minister for his answers. I have got two supplementary questions.

First one is: would Minister envisage the possibility of overshooting the capacity over the next few months into the end of this year and possibly into the first half of next year, particularly if regional airports or other hubs, are seeing any delays in their opening? And that also is in relation to one of my Parliamentary Questions (PQs): what would be the assumptions underlying the projection that the number of flights will rise to 80% and above?

My second supplementary question would be: the Minister mentioned that the recruitment is on track, but is it possible for us to speed up the recruitment of talent, especially since technology and changes over the past two to three years have evolved, and whether some of these technological changes mean that we need new talent locally or globally coming to Singapore?

Mr Speaker, the Member said he would ask quick questions but I think I have to give him a slightly longer answer.

On overshooting capacity, I think what the Member meant by that is whether we expect that we will go beyond what we think is the expected volume. To some extent, there is predictability and the reason why there is predictability is because airlines file their flight plans with the airport slots authority, that is, with Changi Airport. In this case, for the next cycle which is really from October through to March next year, it is called the Northern Winter schedule.

From that point of view, we already have a reasonable idea of the kind of flows to expect. Of course, there may be variations to that for a variety of reasons, whether it is disruptions and so on. But by and large, given what has been presented to our airport, we think that the estimations that we have are within the ballpark. Whether it will exactly turn out the way we expect, I think there are many unknowns, as all of us will appreciate. The Minister for Health talked about some of the risks as well.

We need to just bear in mind that we plan with the capacity in mind, but we also need to be vigilant and be prepared to pivot to a more conservative and careful stance if the need arises.

And, of course, the assumptions that the Member asked about – that underlie this planning, apart from what the airlines submit and so on – is, of course, in general, how the source markets are opening up. In particular, in our part of the world, the Asia Pacific, most have opened up, as I mentioned earlier – Japan, Taiwan, Hong Kong and so on have all opened up.

One of the most significant markets is China and China's opening strategy is something that we have to observe, because every country has to navigate this path based on its circumstances. China is a significant source for us. Pre-COVID-19, China would have accounted for about 20% of our tourism visitor arrivals. That is a major uncertainty as well that we will have to watch out for.

The second point on recruitment and whether we speed up the recruitment, I can assure the Member that all the aviation companies are throwing the kitchen sink at this because this is a very challenging time. We know that there is just a general shortage of manpower and, in particular, for aviation especially on the air side, it is not just about recruitment but we have to make sure that they are trained and they are able to deliver safely for themselves and for all other users of the aviation services. So, this is a major task.

But as I said, if I can just take Members back, we had about one-third attrition in our aviation industry workforce. It was at about 35,000. At the end of last year, we had about 25,000. In the first half of this year, I think about 4,000 were recruited and the aim is really to get another 4,000 workers to join the aviation workforce. That should bring us to about 90%.

In terms of new talent, that really is going to be an important area of focus going forward because of two aspects. Digitalisation and sustainability are going to be key drivers for the aviation industry. For this, we will need specific skill sets. We have to retrain those who are already in the industry and that is happening as we speak. At the same time, we also may need specific types of talent to come on board to augment what we already have. And so, this is something that both the airlines but also the airport and ground handlers are focused on.

16 Dr Tan Wu Meng asked the Minister for Health what support is available for patients with Motor Neurone Disease including (i) patients with mobility needs who cannot easily go from home to clinic for clinical consultations and (ii) patients who are on the home ventilator respiratory support service.

Mr Speaker, patients with Motor Neurone Disease (MND) are cared for by a multi-disciplinary team, which may include neurologists, advanced practice and specialty nurses, physiotherapists, speech therapists, occupational therapists and medical social workers.

Wheelchair-bound MND patients can tap on private ambulances for transportation between their home and the clinic. Special transport arrangements may need to be planned for more severe MND patients who are bedridden, on tube feeding and portable ventilator support. Those facing financial difficulties may be referred to a medical social worker for help with their medical and transport costs.

The National Neuroscience Institute (NNI) also provides follow-up video consultations for some less mobile MND patients to reduce their need to travel to clinic for consultation. Home-based nursing care has also been available for stable MND patients not on ventilation support through the NNI Community Health Programme since November 2020. Under this programme, NNI has provided inter-professional training and advice to community care partners on the management of persons living with neuro-degenerative conditions, including MND. These community nurses are empowered to make home visits to review patients with nursing needs, such as pressure sores and feeding tube issues.

In addition, MND patients needing respiratory support can tap on the the Ministry of Health (MOH)-funded national Home Ventilator and Respiratory Support Service (HVRSS). The HVRSS team from Tan Tock Seng Hospital (TTSH) provides home-based ventilation support, caregiver training and routine follow-up for chronic conditions, including blood tests, care coordination and referrals to other specialists, thus minimising clinic visits for the patient.

Order. End of Question Time. Introduction of Government Bills.

[Pursuant to Standing Order No 22(3), written answers to questions not reached by the end of Question Time are reproduced in the Appendix, unless Members had asked for questions standing in their names to be postponed to a later Sitting day or withdrawn.]

[(proc text) "to amend the Broadcasting Act 1994 and the Electronic Transactions Act 2010 to regulate providers of online communication services", (proc text)]

[(proc text) presented by the Minister for Communications and Information (Mrs Josephine Teo) read the First time; to be read a Second time at the first available Sitting of Parliament in November 2022, and to be printed. (proc text)]

[(proc text) "to amend the Accounting and Corporate Regulatory Authority Act 2004, the Accountants Act 2004 and the Accounting Standards Act 2007, to repeal the Singapore Accountancy Commission Act 2013 and to make consequential and related amendments to certain other Acts", (proc text)]

[(proc text) presented by the Second Minister for Finance (Ms Indranee Rajah) read the First time; to be read a Second time at the first available Sitting of Parliament in November 2022, and to be printed. (proc text)]

[(proc text) "to amend the International Development Association Act 2002", (proc text)]

[(proc text) recommendation of President signified; presented by the Second Minister for Finance (Ms Indranee Rajah); read the First time; to be read a Second time at the next available Sitting of Parliament, and to be printed. (proc text)]

[(proc text) "amend the Carbon Pricing Act 2018", (proc text)]

[(proc text) recommendation of President signified; presented by the Senior Minister of State for Sustainability and the Environment (Dr Amy Khor Lean Suan) on behalf of the Minister for Sustainability and the Environment; read the First time; to be read a Second time at the first available Sitting of Parliament in November 2022, and to be printed. (proc text)]

[(proc text) Order for Second Reading read. (proc text)]

Mr Speaker, on behalf of the Minister for Law, I beg to move, "That the Bill be now read a Second time".

Sir, this Bill contains 23 operative clauses. It makes miscellaneous amendments across a number of Acts. Mr Speaker, Sir, with your permission, may I ask the Clerk to distribute an Annex to my speech.

Please proceed. [A handout was distributed to hon Members. ]

Members may also access this material through the SG PARL MP mobile app. The Annex lists the amendments to be made via this Bill, which I will take Members through.

Clause 2 of the Bill makes two amendments to section 2 of the Interpretation Act 1965. First, the non-exhaustive definition of "repeal" will be amended to clarify that it includes "delete", which is a term that is used in amending legislation. Second, a new general provision will be inserted, which provides that definitions in written laws apply unless the context otherwise requires. This obviates the need to repeat similar provisions in each definition provision in legislation.

Next, clause 3 amends section 9(1) of the Air Navigation Act 1966 (ANA) in two ways. It will expressly enable the Civil Aviation Authority of Singapore (CAAS) to make certain insurance-related regulations, including regulations necessary to comply with the 1999 Montreal Convention. It will also specify that the fees that CAAS is currently empowered to prescribe under section 9(1)(t) can be either one-time or periodic in nature.

I now come to the amendments to the Children and Young Persons Act 1993 (CYPA). The CYPA was amended by the Children and Young Persons (Amendment) Act 2019.

Sections 27 and 55 of the 2019 Amendment Act have not been brought into force. Clause 4 of the Bill makes substantively the same amendments as those sections, but updates references to other statutory provisions that have since been renumbered in the 2020 Revised Edition of Acts. It will also allow the First Schedule and the Second Schedule of the CYPA to be brought into force separately.

Turning to the next amendment, clause 5 deletes the definition of "company" and "corporation" in section 63(1) of the Civil Aviation Authority of Singapore Act 2009 (CAAS Act), because they are unnecessary in the context of the CAAS Act.

Next, clause 6 of the Bill amends four provisions in the Copyright Act 2021 (CA).

The first amendment is to section 193 of the CA. The CA makes a distinction between "works" and "performances", and recognises that both "works" and "performances", can be fairly used for the purposes of criticism or review. Where works are concerned, section 193 of the CA provides that any underlying materials that are incorporated in works are deemed fairly used if the works themselves are fairly used for the purposes of criticism or review. However, this deeming provision does not currently extend to performances. Clause 6(a) of the Bill thus amends section 193 of the CA, such that section 193 will also apply to underlying materials in performances that are fairly used for the purposes of criticism or review.

Second, section 285 of the CA provides that a "public act", which is an act done for the service of the Government, by the Government or by an authorised person, is an exception to copyright infringement. Section 285(2)(a) currently provides that the Government is to inform the relevant rights owner as soon as practicable after the public act is done. Section 285(2)(a) will be amended to signpost that the means by which the Government is to inform a rights owner of the public act is set out in subsidiary legislation.

Third, section 301 provides how copies of a work or a recording of a protected performance should be notated. Subsection (1)(a) will be amended to make clear that the "copy" referred to in that subsection refers only to a copy of a "sound recording" and not other types of works.

Fourth, the CA, which came into force on 21 November 2021, introduced the right for authors to be identified in relation to the public use of certain works. Section 377(2)(b) provides a transitional arrangement for existing works made before 21 November 2021, whereby the first copyright owner's initial assignee or licensee is exempted from having to identify the author of the existing work.

Section 377(2)(b) will be extended to exempt: (a) the first copyright owner and (b) subsequent assignees and licensees beyond the first copyright owner's initial assignee or licensee as well. This amendment will put the first copyright owner, initial assignee and licensee, and subsequent assignees and licensees of an existing work on equal footing.

Next, I will address the amendments to the COVID-19 (Temporary Measures) Act 2020 (COTMA).

As this House is aware, Part 2 and Part 8 of COTMA introduced reliefs for individuals and businesses affected by COVID-19 in certain contracts and situations. The Panel of Assessors for COVID-19 (Temporary Relief) (PACT) and its supporting Registry were formed in April 2020 and heard disputes relating to Part 2 and Part 8.

Since PACT was set up around two and a half years ago, it has issued about 1,070 determinations. This helped parties avoid costly and time-consuming litigation, relating to contractual disagreements arising from COVID-19.

With the COVID-19 situation having stabilised, these urgent reliefs, introduced during very exceptional times, have run their course and are no longer necessary. The Part 2 and Part 8 reliefs are no longer available – they are only applied for prescribed periods, the last of which came to an end on 28 February 2022. It is now time to wind down the PACT Registry.

Clause 7 therefore provides that applications which remain pending at a prescribed date will be deemed to be withdrawn. Determinations and subsequent determinations also cannot be made after a prescribed date.

In this regard, there are 20 applications concerning construction and supply contracts which remain outstanding, which will be deemed withdrawn when this amendment comes into effect. The withdrawal does not affect the substantive rights of the parties. The assessors' role for such applications is to determine whether a Notification for Relief (NFR) was validly issued to enable a party to seek relief under Part 2 and Part 8. For construction and supply contracts, the service of a valid NFR would entitle the affected party to two categories of relief: (i) a moratorium against legal and enforcement action, and (ii) a statutory defence against damages for delays or breaches which are materially caused by COVID-19. Applications relating to the availability of the moratorium are now moot, as the moratorium expired on 28 February 2022, together with the expiry of the prescribed period.

As regards applications relating to the statutory defence, the Assessors' role has always been limited to assessing whether the NFR was valid. The party receiving the NFR could choose to challenge the statutory defence if it is invoked by the serving party in the course of proceedings before a court, tribunal or adjudicator. This right to challenge the availability of the defence before a court, tribunal or adjudicator continues to be available even after these applications for Assessors' applications are deemed withdrawn.

Clause 7 also addresses another issue. Pursuant to section 1(2A) of COTMA, Part 2 expired at the end of 19 April 2022. However, the COTMA regulations permitted applications for an Assessor's Determination in respect of construction and supply contracts to be made up till 30 April 2022. Clause 7 therefore validates applications made from 20 April 2022 to 30 April 2022.

Next, I turn to clause 8. Section 97(5) of the Guns, Explosives and Weapons Control Act 2021 (GEWCA) introduced a new section 7(2) to the Customs Act. This section, which has not been commenced, stated that customs officers are to be provided with "such staves, guns, ammunition and other accoutrements which may be prescribed". Clause 8 of the present Bill inserts a new section 6A to the Customs Act in place of section 7(2). Section 6A is substantively similar to section 7(2), save that the word "staves" is replaced with "batons" and the arms to be provided need not be prescribed. Consequently, the amendments made by section 97(5) of GEWCA is superseded and deleted.

I now come to clause 9, which amends the Extradition Act 1968 (EA).

The Extradition Act was amended in April this year to introduce, amongst others, a new mechanism for fugitives to consent to their extradition. Clause 9 makes several clarifications related to that new mechanism: (a) first, that the Magistrate's power to remand a fugitive who has consented to his or her surrender includes the power to remand such a fugitive who is provisionally arrested and where the formal extradition request from the Requesting State is pending; (b) second, a consenting fugitive does not need to additionally waive his or her right to apply for a review of the committal order; and (c) third, that the power to re-arrest fugitives who escaped during their arrest or from custody covers fugitives who have consented to their surrender. This power of arrest is exercised in the same manner as that involving a person accused of an arrestable offence against the law in force in Singapore.

Next, clause 10 makes amendments to section 29 of the Gas Act 2001, which provides for the inspection, maintenance, repair or renewal, of any part of a gas installation or any part of a gas service pipe linking a gas service isolation valve to the gas installation.

The amendments will clarify that the Energy Market Authority will prescribe persons responsible for the inspection, maintenance, repair or renewal of such parts by way of an order in the Gazette; and section 4(b) of the Energy (Resilience Measures and Miscellaneous Amendments) Act 2021, which has not commenced, deletes the existing section 29(4) of the Gas Act and substitutes it with new sections 29(4), 29(5) and 29(6). The new section 29(4) of the Gas Act relates to obligations on the gas transporter to inspect gas installations or gas service pipes and to notify certain persons to carry out maintenance, repair or renewal following the inspection. This Bill will amend section 29(4)(c) to clarify that the "person" the gas transporter is to notify, is the person prescribed under section 29(3) of the Gas Act to be responsible for such maintenance, repair or renewal, if that person is not the gas transporter.

I now turn to Clause 11, which amends the Second Schedule of the Land Transport Authority of Singapore Act 1995 (LTA Act).

The Second Schedule sets out taxes, fees and charges to be paid to the Land Transport Revenue Account. Paragraph 1 currently relates to fees imposed under the Parking Places Act (PPA). This includes fees under Part 3 of the PPA, which was repealed by the Share Mobility Enterprises (Control and Licensing) Act 2020. Paragraph 1 of the Second Schedule of the LTA Act will be amended to reinstate the original wording that existed before Part 3 of the PPA was introduced.

A new paragraph 26, relating to fees and charges prescribed under the Small Motorised Vehicles (Safety) Act 2020 (SMVA) will be inserted to the Second Schedule of the LTA Act. The SMVA originally made this amendment, but it could not be commenced as there was an existing provision with the same number.

Next, I come to amendments relating to the Medicines Act 1975. Clause 12 deletes provisions in the Medicines Act relating to intellectual property obligations for pharmaceutical products. Those obligations are now found in the Health Products Act 2007 and its regulations. The provisions in the Medicines Act are therefore unnecessary.

In addition, section 76(1) of the Medicines Act 1975 currently provides for the repeal of the Medicines (Advertisement and Sale) Act 1955 (MASA) and the Sale of Drugs Act 1914 (SDA) in the same subsection such that they must be repealed together. Clauses 12(2) and (3) of this Bill provides for the repeal of the MASA and SDA in separate sub-sections so that they can be repealed separately.

I will now turn to the next amendment, which is to the Mutual Assistance in Criminal Matters Act 2000 (MACMA).

Under section 41(1) of MACMA, when Singapore makes a request for mutual assistance or receives a request for assistance in criminal matters, the Attorney-General must notify the Minister. Upon receipt of the notice, the Minister may instruct the Attorney-General to take or not to take action that the Minister thinks is in or against the interests of the sovereignty, security or public order of Singapore.

As part of Singapore's commitment to work with our international partners to combat crime, it is important to ensure Singapore's compliance with international law standards for the timely prioritisation and execution of mutual legal assistance requests.

In this regard, the Minister authorises public officers of appropriate seniority and experience to review such notices from the Attorney-General, in accordance with common law principles. Under these common law principles, which have been upheld by our Courts, a Minister may authorise the exercise of such functions by his or her officers. Nevertheless, as the Minister is responsible to Parliament, the Minister must ensure that such functions are carried out by duly experienced and qualified officers. This has been the case in the context of section 41 notices under MACMA.

Clause 13 of the Bill amends section 41(5) of MACMA to make clear that the Minister's functions under that section may be exercised by a public officer authorised by the Minister. The Minister will nonetheless continue to personally exercise his power for notices as the circumstances require.

Next, I will touch on the amendment to the Pioneer Generation and Merdeka Generation Funds Act 2014 (PMGFA).

Section 16(1)(a) of the PMGFA provides that a Pioneer or Merdeka Generation Senior is eligible for a cash grant to be credited to his or her MediSave or other CPF account during a prescribed period.

However, there are situations where an individual is determined to be a Pioneer or Merdeka Generation Senior after the prescribed period, after verification by the Appeals Panel. Clause 14 of the Bill amends section 16(1)(a) of the PMGFA to enable such individuals to receive the cash grant in respect of the prescribed period, whether the crediting is made during or after that period. Clause 14 also validates the cash grants that have already been credited in such situations.

I now come to the Police Force Act 2004. First, under section 69 of the Police Force Act, the Commissioner or Deputy Commissioner of Police is responsible for the promotion of a special Police Officer of the rank of Deputy Superintendent to the rank of Superintendent. However, the Minister for Home Affairs is responsible for the appointment, reduction in rank, dismissal or discharge of a superintendent.

Clause 15 of the Bill amends section 69 such that the Minister for Home Affairs is the approving authority for the promotion of a special Police Officer to the rank of Superintendent. This ensures that the approving authority for the appointment of, promotion to, reduction of rank, discharge and dismissal of special Police Officers of the same rank is the same person.

Second, clause 15 validates certain previous promotions that have been made by the Minister for Home Affairs or the Permanent Secretary of MHA.

To explain, in previous years, the promotions of special Police Officers from the rank of Inspector to Assistant Superintendent were approved pursuant to the Minister's powers under section 69(1) delegated to the Permanent Secretary to the Ministry of Home Affairs. These promotions should have been approved by the Commissioner or Deputy of Commissioner for Police instead. Clause 15 validates these promotions.

I now come to the amendments to the Protection from Harassment Act 2014 (POHA). Clause 16 of the Bill makes four amendments to POHA. Let me elaborate.

First, the definition of "court" in section 2(1) currently states that "court" for the purposes of sections 12 and 13 and Division 2 of Part 3 means "a District Court (including the Protection from Harassment Court) or a Family Court". These provisions provide for Protection Orders, Expedited Protection Orders and orders relating to false statements to be granted.

Aside from the District Court and the Family Court, other Courts such as the General Division of the High Court can make orders under these provisions. The definition of "court" will hence be amended to "a court of competent jurisdiction". This will ensure that all Courts which may grant Protection Orders, Expedited Protection Orders and orders relating to false statements are included within the definition of "court".

Second, under section 6 of POHA, public service workers are accorded enhanced protection against harassment. Some volunteers provide services similar to public service workers and also frequently interact with the public in the course of providing such services.

Sections 6(5) and 6(6) of POHA will be amended to allow such volunteers to be prescribed as "public service workers", which will accord such volunteers the same enhanced protection against harassment. The Government is working to identify the classes of volunteers who qualify as public service workers and target to bring this amendment into force in 2023.

Third, section 13(5) of POHA currently provides that there shall be no appeal against a decision relating to Expedited Protection Orders made by the District Court under section 13. As decisions relating to an Expedited Protection Order may also be made by other Courts such as the Family Court or High Court, clause 16 amends section 13(5) to replace "District Court" with "court" to make it clear that all such decisions made under section 13 are not appealable, no matter which Court makes the decision.

Lastly, clause 16 makes clarificatory amendments to section 16I of POHA.

Section 16I(4) provides that other civil proceedings may be commenced in the Protection from Harassment Court only if "related to" Part 3 proceedings under POHA in the PHC. Clause 16 of the Bill amends section 16I to define when civil proceedings are related to Part 3 proceedings.

Next, clause 17 of the Bill amends the Public Utilities Act 2001 to increase the maximum number of Board members from 10 to 13, excluding the Chairperson. This will enable PUB to benefit from the contributions of a more diverse Board.

I now come to the amendments of the Registered Designs Act 2000 (RDA).

Section 30A of the RDA, introduced by the Intellectual Property (Amendment) Act 2022, provides express legal effect to disclaimers filed with the Registrar. Disclaimers are indications or statements that limit the rights conferred by registration under section 30 of the RDA.

However, section 30A only applies prospectively. This means that section 30A only confers express legal effect to disclaimers filed on or after 26 May 2022, the commencement date of section 30A of the RDA.

Clause 18 of the Bill therefore introduces a new subsection 2A to provide express legal effect to disclaimers made before 26 May 2022, if it was filed in a manner that was compliant with the RDA and the prevailing rules.

Next, clause 19 of the Bill makes two amendments to the Sentosa Development Corporation Act 1972 (SDCA).

First, it will be explicitly clarified that the definition of "Sentosa" in section 2 includes islands that become contiguous with the island of Sentosa because of land reclamation. This, in turn, clarifies that Sentosa Cove falls within the definition of "Sentosa" as part of the land now known as Sentosa Cove used to be a separate island from Sentosa until the narrow channel that ran between the two islands was reclaimed.

Second, section 6(2) of the SDCA will be amended to provide that any person acting under the direction of the Sentosa Development Corporation (SDC) will be repaid out of the SDC's funds for any expense incurred. This is for consistency with section 6(1) of the SDCA where any member, employee or any other person acting under the direction of SDC is protected from personal liability while acting under the direction.

I now come to clause 20. A Notice to Attend Court is one of the modes of initiating criminal proceedings. It is a notice requiring a person to attend Court at a specified time and date. Currently, where an accused person fails to attend Court on the date stated in a Notice to Attend Court, there are 15 Acts that require an accused person to show cause as to why he or she should not be punished with a fine or imprisonment.

However, other statutes, notably the Criminal Procedure Code 2010, do not have a similar show cause procedure. This means that no additional penalty is imposed on the accused person for the failure to attend Court pursuant to a Notice to Attend Court, even without cause.

To ensure a consistent approach across all criminal proceedings regarding a failure to attend Court, clause 20 of the Bill abolishes the show cause proceedings in the 15 Acts. The Court will continue to be able to issue a warrant of arrest to secure the accused person's attendance in Court. Further, failure to attend Court will ordinarily be taken into account by the Court as an aggravating factor which may justify an increase in the sentence for the underlying offence.

Next, the Insolvency, Restructuring and Dissolution Act 2018 (IRDA). When it was introduced, it consolidated corporate and personal insolvency laws found in the Bankruptcy Act and Companies Act in one place. The IRDA made consequential amendments to several Acts to replace references to the Bankruptcy Act and Companies Act with references to the IRDA. We have since identified some inadvertent omissions in these references, which relate to the creation of an entirely new part in the IRDA. Clause 21 of the Bill corrects the references.

I turn now to clause 22. This clause mainly updates references in primary legislation for consistency with the provisions and terminology in the new Rules of Court 2021.

For example, references to "plaintiff" in existing legislation are now replaced with "claimant" as per the terminology in the Rules of Court 2021 and so on. The changes in terminology do not change the meaning of the amended provisions.

Clause 23 deletes obsolete transitional provisions in four Acts. These provisions were only intended to operate for a transitional period and are no longer necessary today.

To give an example, section 38 of the Intellectual Property Office of Singapore Act 2001 (IPOS Act) empowers the Minister to repeal or amend any written law that is inconsistent with any provision of the IPOS Act. The intention of section 38 was to bridge any gap between existing laws and the newly enacted IPOS Act at that point in time. Hence, section 38 of the IPOS Act is no longer relevant today and can be repealed.

Finally, clause 24 of the Bill repeals provisions in five Acts that were never commenced and have since been superseded by other legislative provisions. For good order, these obsolete provisions will be deleted as they will no longer have to be brought into force.

In conclusion, Mr Speaker, this Bill makes miscellaneous and minor amendments in the manner that I have just described. Sir, I beg to move.

[(proc text) Question proposed. (proc text)]

[(proc text) Question put, and agreed to. (proc text)]

[(proc text) Bill accordingly read a Second time and committed to a Committee of the whole House. (proc text)]

[(proc text) The House immediately resolved itself into a Committee on the Bill. – [Ms Rahayu Mahzam]. (proc text)]

[(proc text) Bill considered in Committee; reported without amendment; read a Third time and passed. (proc text)]

[(proc text) Order for Second Reading read. (proc text)]

Mr Speaker, on behalf of the Deputy Prime Minister and Minister for Finance, I beg to move, "That the Bill be now read a second time."

We sought views from the public on the draft Bill earlier this year and have taken into account the feedback received. We thank the respondents for their inputs.

Let me start with the amendments that give effect to tax measures from Budget 2022.

First, the top marginal personal income tax (PIT), rate of tax-resident individuals will be increased from the Year of Assessment 2024. The portion of chargeable income in excess of $500,000 up to $1 million will be taxed at 23%, while that in excess of $1 million will be taxed at 24% – both up from 22% today.

This move would further enhance the progressivity of our PIT system, where individuals who earn more will contribute more. We estimate that this could raise around $170 million of additional tax revenue per year.

The PIT rates for certain income by non-tax-resident individuals that are pegged to the top marginal tax rate of tax-resident individuals will also be revised to 24%.

Clauses 22, 42 and 44 of the Bill provide for these amendments.

Second, to support data-driven policy-making, operations and integrated service delivery, we propose two amendments to the Income Tax Act and Goods and Services Tax Act to facilitate the disclosure of information by the Inland Revenue Authority of Singapore (IRAS) for official duties.

The first change relates to the scenario where taxpayers such as individuals and companies have provided consent for their information to be shared.

Today, IRAS can disclose such information to public sector agencies or an authorised person who is engaged by the Government or a Statutory Board, if the disclosure is for the sole purpose of administering a written law or public scheme.

For example, to determine what level of subsidy a patient can receive, healthcare personnel in hospitals designated to administer public healthcare schemes may obtain such information with consent, to provide the appropriate subsidies to patients efficiently and conveniently.

However, the current approach has some limitations where the official duties of public officers go beyond administering written law or a public scheme – such as for policy-making or providing public services in an integrated manner.

For example, Enterprise Singapore needs to regularly review its internationalisation schemes that support local companies expanding into overseas markets. Even if the companies have given consent for their information to be shared with Enterprise Singapore, IRAS is currently unable to do so, because such a review does not fall under “administration of a written law or public scheme”.

Where taxpayers have provided consent for IRAS to disclose their information to a public officer, or an authorised person outside the public sector who is engaged by the Government or a Statutory Board, the proposed amendment in the Bill will enable such disclosure by IRAS for the performance of official duties.

Sir, the second change relates to the scenario where taxpayers have not explicitly provided consent for the data disclosure. This will apply only to company-related information and does not include data of individuals.

To enable public sector agencies to carry out their official duties more effectively, the proposed amendment enables IRAS to disclose a prescribed list of identifiable company-related information to other public sector agencies, for the performance of official duties, without requiring the taxpayer’s consent. This list of company-related information will be prescribed in the Income Tax Act and Goods and Services Tax Act.

Let me provide an example of how this approach benefits our companies. With access to the data on specific companies, a public sector agency will be able to identify which are the companies that could benefit from certain enterprise development schemes and proactively share with them information on the relevant schemes.

Without the data sharing, we are faced with a chicken-and-egg problem. These companies may miss out on the benefits as they do not know that they are eligible and they may not apply for the schemes.

We recognise that this approach can be sensitive and we need to strike a balance between improving service efficiency and convenience, versus protecting data confidentiality. There will be two safeguards.

First, information in the prescribed list will be provided in a less granular form. For instance, the company’s sales revenue will be shared in ranges, rather than the exact value.

Such information will also not be disclosed to any person outside the public sector, even if the person is engaged by the Government or a Statutory Board. It will only be disclosed to public officers.

Clauses 3, 41, 43, 46 and 49 of the Bill provide for these amendments.

The information on taxpayers will continue to be safeguarded under existing tax legislation, the Official Secrets Act and the Public Sector (Governance) Act, as well as data governance policies set out in the Government’s Instruction Manuals.

Collectively, these data protections set out when data can be shared across agencies, limit the access to data to only authorised persons and ensure accountability for access and use of data through penalties for unauthorised disclosure and improper use of data.

All persons with access to such information on taxpayers are bounded by secrecy provisions under the applicable tax legislation – Income Tax Act or Goods and Services Tax Act – and the Official Secrets Act, where any unauthorised disclosure of such data is an offence.

Where personal data is involved, non-Government Entities acting on behalf of the Government will also be subject to the Personal Data Protection Act.

Mr Speaker, the Ministry of Finance (MOF) regularly reviews our income tax regime. Let me now elaborate on two of the proposed amendments arising from the review.

First, we will update the definition of local employee for the Mergers and Acquisitions Scheme, to recognise individuals hired under central hiring and secondment arrangements as employees of the acquiring company.

Currently, only individuals that are directly hired by the acquiring company are taken into account for assessing whether the three local employee condition is met.

As businesses may have different hiring practices, the change allows us greater flexibility to recognize an equivalent material outcome of local workers being hired, be it through direct hiring, central hiring, or secondment arrangements. Clause 21 of the Bill provides for this amendment.

Second, we will amend the provisions relating to the Board of Review, also known as the BOR, which is a tribunal set up under the Income Tax Act to hear and adjudicate tax disputes between the Comptroller and taxpayers.

The BOR provisions will be updated and streamlined by:

removing outdated references such as the requirement for lodgement of the notice of appeal in “duplicate” and the petition of appeal in "quadruplicate", which are no longer relevant where documents are sent digitally,

clarifying the Minister's regulation-making powers regarding tax appeals, as well as the case management powers of the BOR and chairperson, and

moving BOR provisions on procedures to subsidiary legislation.

In addition, we propose to allow the chairperson to have the option to convene a one-member coram where appropriate. Currently, each hearing committee comprises at least three BOR members. In deciding whether or not to convene a one-member coram, the chairperson will consider the parties’ submissions, as well as the facts and circumstances of the case.

Taken together, these changes will allow greater flexibility and ensure that BOR cases are resolved in a more timely and efficient manner.

Related amendments will also be made to the BOR provisions in the Goods and Services Tax Act.

Clauses 34, 35, 36, 37, 38 and 46 of the Bill provide for these amendments. Mr Speaker, I beg to move.

[(proc text) Question proposed. (proc text)]

Mr Speaker, I support the amendments to implement the tax changes announced during Budget 2022 as well as the other changes to enhance the progressivity of our tax structure.

My speech, in particular, will focus on the amendments to facilitate the sharing of information by IRAS for official duties.

The first change grants powers to IRAS to disclose information to other Government agencies for the purpose of performing official duties as long as the taxpayers have given consent. Under the current section 6 (Official Secrecy) of both Income Tax Act (ITA) and Goods and Services Tax Act (GSTA), IRAS is obliged to preserve the confidentiality of a taxpayer’s information unless it is for the administration of any written law or public scheme. The second change allows IRAS to disclose to other Government agencies company-related information without the consent of taxpayer.

Both changes are intended to support data-driven policy setting, improved public office operations and integrated service delivery.

Sir, I support the intent. Better and judicious use of data can significantly improve the effectiveness of Government, operations and also better service to the public. However, the obvious concern is how do we safeguard taxpayers’ confidentiality; especially where IRAS may be privy to documents containing sensitive commercial information.

In this regard, I have a few questions for the Senior Minister of State.

First, whether the agencies requesting the information from IRAS would need to justify the specific purposes and use of the information?

Secondly, is there an evaluation and approval process for each of these requests for information and is IRAS the approving authority? What is the governance and accountability structure here?

Thirdly, would the changes have any impact our competitiveness as a premier destination to attract international investments, now that we can disclose this information to the agencies?

Fourthly, with this expansion of the scope for data disclosures and sharing, would there be further safeguards to ensure data confidentiality and privacy?

Sir, it is worth noting that the intent to allow disclosure of data without taxpayer consent apply only to corporate entities and not individual data.

Sir, we need to continuously review and strengthen the safeguards to protect confidentiality and privacy of taxpayers’ information so that we uphold the public’s trust and confidence in the public sector’s handling and use of taxpayer data. It is on this basis of high public trust and integrity that we can then look to further harnessing the value of data within the public sector system to provide more effective government and better public service. Sir, notwithstanding my questions, I support the amendments.

Assoc Prof Jamus Lim.

Mr Speaker, the Income Tax (Amendment) Bill will implement tax changes associated with the Government's 2022 Budget Statement. On balance, I support the Bill. However, I will concentrate my remarks on clause 46, which concerns related amendments to the Goods and Services Tax Act.

My speech will focus on the general merits and principles behind these amendments and, in particular, the impending increase in GST, which in part, necessitates these amendments. More specifically, I wish to revisit the case for rebating fiscal surpluses, in lieu of a more immediate in GST.

As Members of this House are aware, consumer prices continued their stubborn climb in August. Headline inflation clocked in at a scorching 7.5%, a 14-year high last experienced during the throes of the Global Financial Crisis in mid-2008. Pause for a moment and consider what this implies. Were inflation to remain at this rate, prices would double in just nine years.

Think – in 2031, a plate of chicken rice, my favourite example, will cost $7 instead of $3.

50. A slightly used Honda Civic would be $220,000 and that is assuming COE prices do not increase further. A four-room BTO flat in Sengkang, the constituency I represent, would go for $700,000 and likely double that in the resale market.

To place this number in even more stark context, for the half decade between 2016 and 2021, median household income rose by a respectable 2.8% per annum, after adjusting for inflation. But had inflation been just at rates experienced over the past six months, paychecks would have shrunk by about half that rate. For those of us that still rent, the hit has been even more severe. Stories of landlords raising rental by up to 40% are not unheard of. What is worse, core inflation, the stable component of price increases, which strips out the more volatile components of private transportation and accommodation struck 5.1%.

This means that, much like in the US and a number of other economies, price rises are gradually becoming entrenched in people's expectations, running the risk of a self-reinforcing inflation cycle.

To be clear, this is hyperbole. I do not expect inflation to remain at an elevated level of more than 7% over the next decade, nor do I expect that the Monetary Authority of Singapore (MAS) does either. But that does not detract from the fact that higher prices have significantly eroded the purchasing power of Singaporean families. That real and present danger of inflation becoming persistent means that the monetary authority cannot simply stand pat in the face of price pressures.

What is the MAS to do? It has already adjusted depreciation path of the Singapore dollar four times over the past year and has even taken on a more aggressive stance of adjusting the exchange rate upward over the past two cycles. There is concern that in a small, export-oriented economy, an excessively strong Singapore dollar will erode our competitiveness. Since October of last year, Singapore's exchange rate relative to its main trading partners has appreciated by almost 5%. Even so, the main bilateral rate of interest, the dollar exchange rate between Singapore and the US, for which global commodities such as agriculture and energy which we import are pegged, has gone the other way and depreciated by close to 6%.

Small wonder then, that in our economy, which is almost entirely reliant on imported food and fuel, we have continued to battle under the weight of inflation. Singapore's inflation dynamics appear to closely track that of the US, writ small. And since the Federal Reserve remains undeterred in its effort to raise interest rates to break the back of domestic inflation in the US, it is not unreasonable to expect for MAS to embark on at least another round of tightening monetary policy. Things look to remain challenging at least a while longer before they get any better.

Indeed, it appears increasingly likely that we may need to accept that a soft landing, that our economy, where labour markets remain robust, may be a pipe dream. And we if accept that unemployment has to rise, then, our workers are due for a double whammy. Singaporeans everywhere are already feeling the pinch from increases in the cost of living, hurting from things they were previously able to comfortably afford. But should the economy be slow in response to tighter monetary policy, it is the marginal worker that will be displaced from their jobs, losing their incomes at a time when they least can afford it.

With the economy about to face a right jab and a left hook, do we really want to "shoryuken" our workers with a jump in prices of another 1% because of the GST rate hike in January? After all, as I shared in my Adjournment Motion with this House on 5 July, we should not be building up fiscal surpluses at a time when the economy is still in recovery and inflation is biting into our citizens' pocketbooks. I suggested that instead, any excess revenues from taxes and duties should, as much as possible, be rebated back to our people. This is because fiscal policy should be playing a stabilising role rather than amplify the stresses felt by the private sector.

In the time that the speech was delivered, IRAS subsequently reported that tax revenue surged by more than 22% for the financial year 2021/2022. This increase was led by corporate income but individual tax receipts also rose as the revenue across the board for most sources. The largest increase of $2.9 billion was due to higher stamp duties, which due to, in IRAS' own words, "a buoyant property market" and "an increase in property transactions". Notably, the take from GST, also increased by 22% even without any increase in the rate of GST, telling me observers also expect the tax revenues in the upcoming fiscal year are likely to increase yet further. One analyst said that he expected Government revenue to continue exceeding Budget projections while another believes that this increase will be due to strong corporate profits, rising wage growth and higher property tax and stamp duties.

In my speech on the Budget this year, I suggest that with the inflation fire burning as hot as it did, raising GST would only add fuel to the flame. That was back in February, when inflation was only 4.3%. Inflation is now almost double this rate.

The Government has previously argued that they stand ready to address inflation with additional measures. Deputy Prime Minister Lawrence Wong assured this House during his Budget speech and I quote: "If inflation turns out to be persistent and higher than expected, we as the Government will deal with this separately through other tools". He reiterated this position in April stating that the Government will assess the overall situation and then consider what additional steps they could take.

One immediate objection to rebating fiscal surpluses is that the increase is only reflective of a low base from repressed collections in the prior year. But the revenues of $60.7 billion booked last year is not only larger than the low base of $49.6 billion booked last fiscal year, understandably due to pandemic related reasons, but also almost $9 billion higher than the average of the three years before.

Whichever our base year, it is evident that last year's revenue was an anomaly larger than previously anticipated. Another objection is that unexpectedly high surpluses, much of which are derived from real estate related duties, are unlikely to be replicated and hence should not be utilised for recurrent expenditure. In principle, this is true. We should not be planning recurring expenditures on the basis of one-off revenue gains.

Yet, what is being proposed here is likewise a one-off expenditure meant to tide households over this difficult period of high inflation. Nobody expects a continuous stream of payout from the Government once inflation returns to historical norms. Moreover, there is the prospect of even more extraordinary revenues in the forthcoming months. This Government had previously indicated that it would be unwise to plan for new revenues arising from the OECD-led BEPS collaboration to roll out a minimum corporate tax. This caution may appear to be warranted, given the unwillingness of the United States Congress to ratify the deal, which ironically, it helped broker.

But Mark Twain, the American novelist and social critic, is often said to have quipped that reports of his own death had been largely exaggerated. And much like this quote, reports of the demise of the global corporate minimum tax appear to be incorrect or at least premature. There are good reasons to believe that in the medium run, there are strong incentives for non-adopters of the treaty, such as the US, to continue to do so, as long as other major economies also ratify it.

The probability that this tax will proceed regardless of American participation or acquiescence lends further reason for the Government to rebate surplus tax revenue now. Were the agreement to proceed, even in slightly diluted form, it will almost certainly require changes to local corporate tax laws that are far more likely to raise corporate tax revenues then diminish them. The takeaway is that we appear to have fiscal wiggle room to move forward with such a rebate, both now and in the future.

What are some options that may be available to the Government should it choose to rebate the $8.7 million windfall revenue? In June, Deputy Prime Minister Lawrence Wong announced a $1.5 billion support package, which still leaves $7.2 billion on the table. One approach is to postpone the GST tax increases. Even if we accept that we cannot, in Deputy Prime Minister Wong's own words, "keep delaying the GST tax increase given our pressing revenue needs", we can at least try to forestall the increase for another two years. This will afford our households and businesses a breather and allow our economy to avoid a simultaneous constriction of both monetary and fiscal policy next year.

Another alternative is to distribute the amount via GST Vouchers. This will amount to another beefing up of the GST Voucher scheme similar to what had been announced earlier this year. The Government had previously suggested that GST expenses would be fully offset for almost 20 years for our poorest households and even for the richest, they will be covered for around two and a half years. The reality of this claim has now since been eroded by inflation and the vouchers would only make up less than 19 years for those in HDB 1- and 2-bedroom flats, and between one and six months less for others. Another GST Voucher distribution with a for temporary targeted and timely support for our most vulnerable groups and help restore the Government's original promise of the number of years of offset.

A third strategy is to roll another off-Budget support package that would offer broad support, similar to the Resilience, Solidarity, Fortitude and Assurance packages, for which I am sure, the Government will accompany with another clever moniker – perhaps "Reassurance".

Such a move recognises not only lower-income quintile groups, while undeniably disproportionately affected by inflation, are not the only ones that have faced difficulties due to a higher cost of living.

Of course, the Government may choose as it did during this year's Budget to combine a broad package that is with additional GST Voucher support. The point is that exercising, any one of these options or them in combination, can make a significant difference to the immediate financial circumstances faced by our struggling households.

Let me be clear. The Workers' Party remains opposed to a GST hike for reasons that we have previously articulated – not least because we believe that there are alternative revenue sources that could still be tapped. However, if the GST hike must go ahead now, the least we can do is to further soften the blow with tools that we already have in hand.

Ms Hazel Poa.

Mr Speaker, the Bill permits the Comptroller to disclose information with consent to public offices and private individuals engaged by the Government to assist public officers. These private individuals have to execute a declaration of secrecy and commit an offence if they were to disclose such information received. Can the Minister tell us what is the penalty involved for this offence? Would that be under section 94 of the Income Tax Act, which states that the penalty is a maximum $5,000 fine and in default, imprisonment not exceeding six months. Is this adequate for deterrence purposes?

Under the PDPA, the penalty for unauthorised disclosure of personal data is a maximum $5,000 fine or imprisonment, not exceeding two years or both. This is more severe than the penalty under the Income Tax Act and yet, income information is something that most consider highly confidential and sensitive, more so than other personal data, like addresses, phone numbers and so on.

Will the Minister review the penalty for unauthorised disclosure of income information?

Secondly, what measures are in place to prevent individuals with access to confidential income information on individuals and companies from utilising that confidential information to benefit themselves or their companies financially? What penalties are in place for unauthorised utilisation of information? The financial gains for such unauthorised utilisation may outweigh a $5,000 fine.

The Bill also permits the Comptroller to disclose information listed in the 11th Schedule without the person's consent. I had earlier intended to ask for an explanation of under what circumstances this would be required. But I note from the Senior Minister of State's speech earlier that he mentioned that this is for the purpose of certain Government departments being able to proactively approach companies that may qualify for certain Government financial assistance or other assistance programmes. I appreciate the good intention of this move but feel that it would be better if the Bill then specifies under what circumstances such disclosure without consent can take place, instead of leaving it open-ended, which then throws the gate open for disclosure without consent under any other circumstances.

The 11th Schedule currently lists only company information and not information on individuals. However, clause 41 of the Bill allows the Minister to amend the 11th Schedule. This seems to suggest that the Minister will be able to add personal information into the 11th Schedule subsequently. If so, this would raise privacy concerns and is quite a major departure from what the current Bill contains.

I have grave concerns about this power being vested in a single individual. Any such decision should be justified and debated in Parliament. I therefore suggest that instead of amending section 106(3), to insert instead section 106(4) to allow the Minister to amend the 11th Schedule subject to the barring of any individual information being included.

Mr Louis Ng.

Sir, this Bill proposes to implement the changes to the tax system announced in Budget 2022. On the whole, these changes will make our tax system fairer and more efficient, and support Singapore's growth across a whole slew of sectors.

I have clarifications on two areas.

My first point is on information sharing by IRAS. The Bill includes provisions to allow IRAS to share information to public officers and other authorised people. I have four questions on this.

First, can the Senior Minister of State share in what situations do Government bodies envision using the information-sharing provisions in the new section 6(12)?

Second, can the Senior Minister of State share how will IRAS obtain "express consent" under the new section 6(12)? When seeking consent, to what standards will the Government bodies hold themselves? Will they state the exact piece of information to be shared, the frequency of this information sharing, the recipient of the information and the intended usage of that information? Or will Government bodies ask for a blanket agreement without providing such details?

Third, can the Senior Minister of State share if someone can be held in contempt of the authority of a public servant for not providing consent to disclose their income information under section 6(12)? After all, many actions involving non-disclosure of information constitute such an offence under the Penal Code, including refusal to answer a public servant authorised to question and obstructing a public servant in discharge of their public functions.

Fourth, the new section 6(12B) allows IRAS to disclose certain prescribed information without consent. One piece of information is whether a company claimed deductions under seven sections in the Income Tax Act. Can the Senior Minister of State share why these seven specific sections were chosen for the 11th Schedule? Why not any of the other deductions in Part 5 of the Act? The rationale for the differentiated treatment is unclear.

My second area of clarifications is on the hearing of appeals by the Board of Review. I have three questions.

First, the new section 78 will allow the chairperson of the Board of Review (BOR) to appoint a single member of the Board to hear a case if the issues involved are not complex. The chairperson is required to have regard to the facts and circumstances of a case in deciding whether to appoint only a single member to hear the case. Can the Senior Minister of State share if the chairperson will take into account the preferences of the parties to the case in deciding whether a hearing by a single Board member is appropriate? For instance, there may be cases where the issues are not complex but the relationship between parties are extremely acrimonious and it may be preferable to have the case heard by a panel.

Second, the Bill proposes substituting a number of terms. Can the Senior Minister of State clarify if these substitutions are intended to be significant? For instance, "in the absence of a member of Board" is substituted by "by committee where a member becomes unavailable". Should these terms be interpreted differently? Additionally, "do not consent" is substituted by "object" in a number of provisions. Is this substitution significant and is a positive expression of an objection now required where previously the absence of consent would suffice?

Third, sections 80A and 80B allow parties to object to the hearing of an appeal in various cases. Section 80A provides that "the parties may object" whereas section 80B provides that "any party may object". Can the Senior Minister of State clarify if the objection of a single party is sufficient in both cases? If not, can the Senior Minister of State clarify when are the objections of both parties required and what is the rationale for drawing this distinction?

Sir, notwithstanding these clarifications, I stand in support of the Bill.

Mr Saktiandi Supaat.

Mr Speaker, Sir, the Income Tax Act is one of the most frequently amended statutes in Singapore. Since the 1980s, it has been amended almost every year so as to carry out the Government's revised fiscal strategy announced in its latest Budget Statement.

This amendment Bill is no different. Many of the matters of policy or principle would already have been debated in this House when the Government's 2022 Budget Statement was presented.

Hence, I would just like to seek some clarifications on the specific changes proposed in this amendment Bill, before touching on a couple of issues which I believe should be considered in our periodic review of Singapore's income tax system. Mr Speaker, in Malay, please.

(In Malay): [Please refer to Vernacular Speech.] This amendment Bill does not seek to implement all the tax changes announced by the Deputy Prime Minister and Minister for Finance at Budget 2022.

The headline change in this amendment Bill is the announced increase in the top marginal personal income tax rate with effect from Year of Assessment 2024, where chargeable income in excess of $500,000 up to $1 million will be taxed at 23% instead of 22%, while chargeable income in excess of $1 million will be taxed at 24% instead of 22%.

By my calculation, this change will only affect individuals who are making an average of more than $41,000 per month. The Deputy Prime Minister has commented during the Budget debate that we cannot sustain a tax system and hold our society together if "the bulk or all of the tax burden is borne by a small group of people at the top end". Based on current data, may I ask how many taxpayers will this change affect? What proportion of the total personal income tax collected are they already responsible for today?

Further, what are the main assumptions underlying the projected $170 million in additional tax revenue per year? Since the announcement of such an increase in February 2022, has the Government or IRAS detected any efforts by such high-income individuals to "offshore" their earnings? I am concerned that the lead-time before 2024 would allow companies and individuals to restructure their remuneration packages and erode the additional revenue we expect to receive.

(In English): Moving on to my second area of focus. Of particular interest to me are the amendments to facilitate disclosure of tax information to support data-driven policy-making, operations and integrated service delivery. Just this year, I have spoken in this House and filed a Parliamentary Question on how we should leverage data and technology to "push" schemes and services to Singaporeans and Singaporean businesses.

The amendment Bill broadens the powers of the Comptroller of Income Tax to disclose tax information to any public officer or officer of a statutory board for the performance of any official duties, in some cases without the consent of the person to whom the information relates. We have already seen how useful such tax information can be. As Minister Indranee had shared during this year's Committee of Supply debate, IRAS' data across various tax types was used to automatically disburse more than 110,000 payouts worth almost $1 billion under the Rental Support Scheme.

However, there is no doubt that the tax information is highly sensitive and confidential. If we are to expect an increased flow of such information between Ministries and Statutory Boards, will there be any enhanced safeguards to protect the secrecy of the data? The SingHealth episode tells us that the risks of cyberattacks and data breaches cannot be understated. Government data is not immune from these risks. In fact, they are likely to be higher value targets for malicious threats.

Finally, if the new disclosure regime is aimed at supporting data-driven policy-making, operations and integrated service delivery, what is the basis of distinguishing between the 11th Schedule information which may be disclosed without consent, and other disclosures which will require the express consent of the person to whom the information relates? What percentage of taxpayers have already provided their express consent to the existing disclosure regime and how does the Government or IRAS intend to obtain fresh consent for the new, expanded disclosure regime? Has there been any public consultations with companies which may be impacted and the extent of data which may be disclosed without consent and what the data collected will be used for? I believe the Senior Minister of State has given a brief explanation on what the data will be used for, but I think my other questions are somewhat new in some ways.

The third area in my speech is something that relates to the administrative flexibility that characterises the Government. As I understand it, clause 15 of the amendment Bill seeks to harmonise the accounting basis on which insurance companies prepare their financial statements. Insurance companies will no longer have to prepare financial statements on one basis for the purpose of regulatory returns to be submitted to the MAS and another set of financial statements on a different accounting basis for tax computation purposes.

Even though this change may cause IRAS to have to deal with insurance companies on a different reporting cycle from other taxpayers, I expect such a change to help reduce compliance costs for tax-paying insurance companies. In turn, this could further improve their profitability in the longer term, leading to an increase in the corporate income tax collected. Can this be extended more generally to other types of companies as well?

Taken together with the move to facilitate the disclosure and flow of tax information between Ministries and Statutory Boards, there may even be room for companies to file a single return to satisfy all its regulatory tax and other statutory obligations in future. This may not be a simple switch, but I urge the Government to consider such a possibility as it would boost Singapore's attractiveness as a place for doing business.

My fourth area of focus relates to the changes to the appeal process before the Income Tax Board of Review.

Under the amendments, the chairperson of the Board may appoint a single member, instead of a committee of three members, to hear appeals in a particular case. Will different fees be prescribed for appeals before a one-person panel and before a three-person panel? Will the factors guiding the chairperson's discretion be set out in regulations? Can the chairperson's decision be appealed?

Can I also clarify that the proposed new section 80(2) will not prevent a duly authorised officer of an appellant company, including in-house counsel, from appearing at the hearing before the Board? Because section 80(2) presently states that an appellant can attend "in person" but that will be removed under clause 36 of the amendment Bill.

Finally, allow me to wrap up by touching on one final point that have not been dealt with in this amendment Bill, but which I feel should be considered as part of the periodic review of the income tax system.

As I had again raised in my speech during the Budget debate this year, it may be useful to relook the option of assessing personal income tax on a current-year, pay-as-you-earn basis. In the current economic environment, individuals may experience volatility in income levels or in employment from one year to the next. What are the hurdles that would prevent us from moving away from a preceding-year basis to one that can allow Singaporeans to better manage their cash flow by matching tax payments with contemporaneous income? Mr Speaker, Sir, notwithstanding the clarifications sought, I support the Bill.

Senior Minister of State, Chee Hong Tat.

Mr Speaker, I thank hon Members, Mr Liang Eng Hwa, Assoc Prof Jamus Lim, Ms Hazel Poa, Mr Louis Ng and Mr Saktiandi Supaat, for their comments and suggestions on the Bill. Please allow me to now respond to the points they have raised.

Mr Saktiandi Supaat asked how many taxpayers will be affected by the increase in the top marginal personal income tax, or PIT, rate, the proportion of the total PIT contributed by them and our projections of additional revenue which can be collected.

The increase in PIT rates will affect the top 1.2% of PIT taxpayers, who account for about 35% of our total PIT revenue. We estimate that this change would raise around $170 million of additional tax revenue per year based on the actual taxpayer base in Singapore in the Year of Assessment 2020 (YA2020).

Mr Saktiandi Supaat also asked whether the Government or IRAS has detected any attempts by high income individuals to "offshore" their earnings, such as restructuring or moving their assets overseas to avoid tax in Singapore.

Sir, under our PIT regime, income tax is levied on income sourced in Singapore or received through partnerships in Singapore from abroad. This includes instances where individuals derive income from providing services in Singapore to overseas-based employers. They are subject to income tax in Singapore.

We do not tax individuals on foreign-sourced income. For example, a person who acquires income generating assets overseas such as by investing in overseas property will pay the applicable taxes and other costs in that jurisdiction.

IRAS has a robust compliance and audit programme to identify high risk cases for review. This is a risk-based assessment. In cases of tax avoidance, IRAS also has powers under the Income Tax Act to impose a surcharge of 50% on the amount of tax imposed by IRAS.

Members are aware that we have been raising our taxes for higher-income individuals in recent years such that those who earn more contribute more. As Mr Saktiandi Supaat alluded to in his question, many high net worth individuals are globally mobile and some of them may shift away from Singapore to alternative jurisdictions with more competitive tax rates if our tax rates are too high. If this happens, our tax base and our tax collections will be eroded. We therefore need to weigh the trade-offs carefully.

Mr Saktiandi Supaat suggested that PIT could be assessed on a current year, pay-as-you-earn basis so that taxpayers can better manage their cashflow by matching tax payments with current year income.

Sir, I understand the intent behind Mr Saktiandi Supaat's suggestion. It is an alternative that we considered before and there are pros and cons to adopting such an approach.

First, a current year, pay-as-you-earn basis for PIT assessment means that the tax payable will be withheld every month by employers and then paid to IRAS. While it matches tax payments more closely with the taxpayer's income, it also reduces their take home pay every month instead of giving them the option of paying the tax using their annual bonus or other sources of income.

Second, some individuals, especially self-employed persons and those with higher variable salary components, may have difficulties estimating their current year income for tax reporting purposes.

Third, such a system could result in greater compliance cost for taxpayers and higher administration costs for IRAS compared to the current arrangement where individuals pay their taxes this year based on actual income earned in the previous year.

To help taxpayers with their cashflow, which I think is the intent of what Mr Saktiandi's suggestion is about, IRAS allows interest-free GIRO instalments up to 12 months for individuals and 10 months for companies.

For those who have difficulties paying, sometimes due to unforeseen personal and family circumstances, they can approach IRAS for assistance. During the economic downturn such as in 2020, we automatically deferred GIRO deductions for corporate tax and income tax for self-employed persons to help them manage their cashflows.

Mr Saktiandi also asked if we could extend the approach taken to ease insurance companies' tax filing compliance by harmonising the accounting basis, to other general taxpayers.

I wish to clarify that insurance companies, like any other company, are not required to prepare a separate set of financial statements for tax purposes. Companies use the information in their financial statements primarily to prepare their tax computations.

Due to changes in the financial reporting standard for insurance contracts, the financial statements of insurance companies will no longer include some information needed to prepare their tax computations. We will allow insurance companies to use the relevant information in the regulatory returns filed with MAS for tax computation purposes.

Sir, I would now like to address the comments from Assoc Prof Jamus Lim.

Sir, I think firstly, to clarify, we do not have – if I heard Assoc Prof Jamus Lim correctly – excess revenues. There were some one-off upsides that we got this year – I think he acknowledged those points as well – from property, for example. But the overall fiscal space for Singapore remains tight, especially because, looking ahead, we also have some structural changes in our society, such as an ageing population which will require us to spend more on healthcare.

This has been explained previously by Deputy Prime Minister Lawrence Wong and also, I believe, Deputy Prime Minister Heng Swee Keat when he was the Minister for Finance.

Secondly, on the impact of GST, we have already provided for a comprehensive offset package and Deputy Prime Minister Lawrence Wong has also given the assurance that we will update the package to ensure that we take into account higher prices. So, yes, inflation is higher than when we first started but our assurance and our commitment remain that we will make sure that lower-income Singaporeans will not feel the impact of the increase in GST for at least 10 years. That commitment remains.

Thirdly, on the impact of higher prices, the Deputy Prime Minister has also said in this House and also at other forums that the Government is monitoring closely what the impact of higher prices is on households and families, especially on lower- and middle-income households. Because as I mentioned in my reply to Mr Ang Wei Neng earlier during Question Time, lower- and middle-income households face a bigger impact from rising prices. Therefore, we want to make sure that we provide more help to these families.

There will be some schemes, as Assoc Prof Jamus Lim also acknowledged, that will be broad-based and would be helping every family like the CDC Vouchers and the Household Utilities Credit, but there will be some that are more targeted towards lower- and middle-income households. This is important.

Also, as we look ahead, how we can help our companies to transform, improve productivity, become more innovative, more competitive, help our workers, through our tripartite partnership with employers and with unions, to upskill and become more productive.

This is still the most fundamental and most effective way of helping our workers to cope with rising inflation. It is to help them to increase their wages in a sustainable way through a combination of policies but also through skills upgrading, productivity improvements, making sure that Singapore's economy remains competitive.

If we can do that, then, as Assoc Prof Jamus Lim mentioned, we can then have real wage growth, real income growth.

Sir, I also want to thank Assoc Prof Jamus Lim for his suggestions earlier. He gave some ideas of what could be done. These are actually very much in line with what the Government has already done. Some of the existing measures – he mentioned GST Vouchers, he mentioned some of the support packages that we have, some of the rebates that we can give – these are things that we have done. As Deputy Prime Minister Lawrence Wong said, we will continue to monitor the situation and if it is necessary to do so, we are prepared to provide more help, to help Singaporeans to cope with rising prices.

Sir, let me now address questions raised on the amendments related to the Board of Review (BOR).

In relation to Mr Saktiandi Supaat's query, we will not hardwire the factors guiding the exercise of the chairperson's discretion in regulations. Different cases may bring up different factors and considerations. The chairperson would be best placed to make a judgement call, taking into account the pertinent facts and circumstances in individual cases.

Mr Louis Ng asked a related question on whether the chairperson will consider parties' preferences in deciding whether to appoint a single-member quorum. The parties may indicate their preferences in their submissions and these inputs will be considered by the chairperson in making the decision.

On the appearance by an appellant company before the Board of Review, the proposed new section 80(2) is intended to make clear that there is no need for physical hearings to be held. It does not alter the existing position on who may appear before the board as an appellant company representative.

Mr Louis Ng also asked if the substitutions of certain terms are intended to be significant, such as replacing "do not consent" with "object to" and replacing "in the absence of member of board" to "by committee where member becomes unavailable" in section 80A. Sir, these changes are meant to streamline the language of the provisions for better clarity. They do not effect a change in the substantive meanings of the terms they replace.

Mr Louis Ng also sought clarification on whether any difference is intended between sections 80A and 80B, as to whether the objection of a single party is sufficient or if such objections will have to be made by both parties.

The intention is the same for both sections. If any party objects, the matter will have to be reheard either by a new hearing committee or the newly appointed single-member committee to ensure fairness to the parties.

Next, I will address the clarifications raised by Members on the proposed amendment to facilitate the disclosure of information by IRAS for official duties.

Mr Liang Eng Hwa sought clarifications on the evaluation process and governance for data sharing. IRAS evaluates each request for information against existing tax legislation as well as a standardised set of criteria set out in the Government's instruction manual. This includes ensuring that the purpose of disclosure is aligned with what is allowed in legislation and that the information requested is proportionate and relevant to the purpose.

Mr Louis Ng asked under what situations IRAS would share information with public sector agencies and authorised third parties with the consent of taxpayers under the amended section 6(12). Currently, with taxpayer's consent, IRAS is already allowed to disclose information to public sector agencies and authorised persons engaged by the Government or Statutory Board if the disclosure is for the sole purpose of administering a written law or public scheme. The proposed amendment to section 6(12) in this Bill allows IRAS to disclose such information for purposes beyond that of administering a written law or public scheme as long as it is for official duties.

Mr Louis Ng also asked if it would constitute a contempt of authority for refusing to provide consent to the disclosure of information under this section. I would like to assure Mr Louis Ng that this will not be the case. The taxpayer is allowed to withhold consent.

Mr Louis Ng and Mr Saktiandi Supaat sought clarifications on the process of seeking consent from taxpayers to share their information. The agency seeking consent will provide sufficient information in any request for consent so that taxpayers can make an informed decision whether to give their consent or not. For example, the taxpayer will be told upfront of the information to be disclosed, the purpose of sharing such information and the persons whom the information may be disclosed to.

Consent that had been provided by taxpayers for IRAS to disclose the information for a purpose under the ambit of "administering a written law or public scheme" will continue to be valid. Should public sector agencies require that information for another purpose beyond administering written law or a public scheme in the future, fresh consent will be required. This will need to be obtained under the new section 6(12) as amended by this Bill.

Mr Louis Ng and Mr Saktiandi Supaat asked about the basis for the prescribed list in a proposed new section 6(12B), which can be shared by IRAS with public sector agencies without requiring taxpayers' consent for the disclosure. As I explained in my speech earlier, we have taken a calibrated approach to safeguard information confidentiality. The prescribed list of information under section 6(12B) is limited to company-related information that have been more frequently required by public sector agencies. This includes the range of revenue earned by the company and a yes-or-no indication on whether the company has claimed tax deductions such as for R&D expenditure in Singapore or expenditure on overseas business development.

So, these information in the prescribed list will be disclosed in less granular format, in ranges or as a yes-or-no field, rather than the exact value.

Ms Hazel Poa observed that the prescribed list could potentially be expanded to allow sharing of information and I think she acknowledged the point that I made that it would only be for company-related information. I want to assure Ms Poa that this will continue to be the case – the prescribed list will only be for company-related information.

Collectively, these proposed amendments are intended to facilitate efficient data-driven policy-making, operations and integrated service delivery for public sector agencies to serve the public more effectively. I agree with Members on the need for robust safeguards even as we do so. This is very important. Information on taxpayers will continue to be safeguarded under existing tax legislation, the Official Secrets Act and the Public Sector Governance Act, as well as the data governance and security policies set out in the Government's Instruction Manuals.

Besides offences stated in the tax legislation, the Public Sector Governance Act further criminalises the acts of unauthorised disclosure of data, improper use of data and unauthorised re-identification of individuals from anonymised data.

Ms Hazel Poa asked about the adequacy of penalties for unlawful disclosure of information by an authorised third party engaged to assist public officers with their official duties. For unlawful disclosure constituting an offence under section 6 of the Income Tax Act, penalties under section 94 would apply and this carries a maximum fine of $5,000 or in default of which imprisonment not exceeding six months. For such unlawful disclosure, the offender could also be subject to penalties under the Official Secrets Act, Personal Data Protection Act or other relevant Acts. So, it is not only through the tax legislation but also through other Acts.

As Mr Saktiandi Supaat pointed out, there is a need to continually bolster our data security in the face of evolving threats. The Government has been actively strengthening our data security regime to protect sensitive data and this is an important area of work as we become more digitally connected. Mr Speaker, I beg to move.

Any clarifications? None.

[(proc text) Question put, and agreed to. (proc text)]

[(proc text) Bill accordingly read a Second time and committed to a Committee of the whole House. (proc text)]

[(proc text) The House immediately resolved itself into a Committee on the Bill. – [Mr Chee Hong Tat]. (proc text)]

[(proc text) Bill considered in Committee; reported without amendment; read a Third time and passed. (proc text)]

[(proc text) Order for Second Reading read. (proc text)]

Mr Speaker, Sir, on behalf of Mr Tharman Shanmugaratnam, Senior Minister and Minister in charge of the Monetary Authority of Singapore (MAS), I beg to move, "That the Bill be now read a Second time".

The Business Trusts Act 2004, or BTA, provides a framework for the governance of registered Business Trusts (BTs), which are enterprises that combine the characteristics of both a company and a trust. The BTA also facilitates the use of BTs as listing vehicles and as a new asset class for investors.

But unlike a company that can only pay dividends out of its accounting profits, a key feature of a BT is the ability to pay dividends out of its cash profits. This makes it particularly suited to businesses with stable growth and high cash flow, such as infrastructure businesses.

Many requirements in the BTA were adapted from the Companies Act. The Bill proposes updates to the BTA that are consistent with amendments that have been made to the Companies Act to enhance the regulatory framework for companies. In addition, MAS has also identified other legislative amendments that are needed to maintain the robustness and relevance of the regulatory regime for business trusts registered under the BTA.

Mr Speaker, I will now go through the key amendments in the Bill.

Let me start, first, with the amendments to better align the BTA with the regulatory regime for companies. These are mainly in three areas.

First, is to enhance transparency and corporate governance. The Bill introduces requirements for unlisted business trusts that are registered under the BTA to obtain and maintain information on their controllers, also commonly known as beneficial owners and to also provide such information to MAS and other public agencies upon request.

With these amendments, unlisted registered business trusts will be subject to the same transparency requirements as unlisted companies regarding their beneficial owners. These requirements will help to mitigate the risk of business vehicles being used for illicit purposes, regardless of whether they take the form of a company or a trust.

Currently, directors of trustee-managers of registered business trusts are required to disclose conflicts of interest in transactions as well as their interests in the registered business trusts. The Bill will extend such requirements to CEOs of trustee-managers, in recognition of the influence that they have on the affairs of business trusts. The change is consistent with existing disclosure requirements that are applicable to CEOs of companies under the Companies Act.

The Bill further introduces requirements for auditors of listed registered business trusts and their subsidiaries to seek MAS' consent if they wish to resign before the end of their term. It also sets out procedures for the appointment of a new auditor where the resigning auditor is the sole auditor, including a reserve power for MAS to make such an appointment.

These requirements will allow MAS to prevent a listed BT or its subsidiary from being left without an auditor. Through the application process, MAS may also be alerted to any potential breaches of the BTA and the Accountants Act. This is in line with provisions in the Companies Act in relation to auditors of public interest companies, which include listed companies and their subsidiaries.

The second key area is to strengthen the rights of unit-holders of registered business trusts. Currently, unit-holders holding at least 10% of the voting rights of unit holders present at a meeting have the power to call for a poll. The Bill lowers this threshold to 5%, making it easier for unit-holders to call for a poll on issues that they are most concerned with.

The Bill also expands the scope of the statutory derivative action in the BTA to allow a unit-holder to apply to the Court for leave to commence arbitration on behalf of all unit holders of the BT or to intervene in an arbitration to which the BT is a party. This amendment will align unit-holders' rights to bring a derivative action with that of shareholders under the Companies Act.

In addition, where an application to wind up a registered BT has been filed in Court, the Bill expands the range of orders that the Court may make, including an order to buy out the interests of one or more unit-holders.

Currently, a Court hearing such an application can only make an order for the registered BT to be wound up. The additional remedy helps to protect the rights of minority unit-holders as there may be cases where the company is still viable and it would be a more efficient solution for the majority to buy out the minority or vice versa.

The third key area is to improve the ease of doing business and to reduce administrative burden. These include changes to simplify deadlines for annual general meetings (AGMs) and the filing of annual returns. Currently, registered business trusts are required to hold their AGMs once every calendar year and not more than 15 months after the preceding AGM and are also required to file annual returns within one month after the AGM. These requirements do not refer to the financial year end of the registered BT. The Bill will align these timelines with the business trust's financial year end.

The Bill will also mirror amendments to the Companies Act to reduce the number of documents accompanying a set of financial statements.

To facilitate electronic communications by registered business trusts, the Bill allows for electronic transmission of notices and documents with unit-holders' implied or deemed consent, in accordance with the trust deed of the registered BT. Currently, a registered BT wishing to publish notices and documents on a website can only do so with its unit-holders' express consent. The amendments will help to increase efficiency in this regard.

Mr Speaker, I will now cover the next set of amendments, which are to strengthen governance standards and safeguards for registered business trusts, taking reference from the regulatory regime for Real Estate Investment Trusts (REITs).

Business trusts are structurally similar to REITs in that both are trusts constituted by a trust deed and, unlike companies, are not legal persons. Both are also usually managed by an external manager. Business trusts are managed by trustee-managers and REITs are managed by REIT managers.

This external management model introduces governance risks such as potential conflicts of interest between the external manager and also unit-holders. Unit-holders' ability to vote to remove the external manager is a fundamental safeguard against such risks.

Currently, a trustee-manager can only be removed by unit-holders by way of a resolution passed by not less than 75% of the voting rights of all unit-holders present and voting at a general meeting. For REITs, there is a lower removal threshold of more than 50% which applies.

The Bill will align the removal threshold for trustee-managers with that of REIT managers. This will help strengthen accountability to unit-holders.

In conclusion, the amendments will enhance the transparency and governance of registered business trusts in Singapore. They will streamline regulatory requirements and reduce compliance costs. This will improve the efficiency and robustness of the BT regulatory regime, benefiting the industry and investors. Mr Speaker, I beg to move.

[(proc text) Question proposed. (proc text)]

Mr Louis Ng.

Sir, this Bill will align provisions for business trusts with the Companies Act and strengthen governance for business trusts.

Business trusts are a common structure for tapping on capital on the SGX. The proposed amendments to strengthen governance of business trusts are welcomed. I have clarifications on two areas.

Let me start by thanking MAS for conducting a public consultation before bringing this Bill to Parliament. Public consultations not only show that the Government is keen to listen but they also help our Government agencies guard against blind spots they may have during the policy-making process.

I also thank MAS for publishing a response paper to this public consultation. This gives respondents the assurance that their feedback is heard loud and clear.

My first set of clarifications has to do with loans to directors for defending against proceedings.

Firstly, can the Minister of State clarify why loans to directors for defending against regulatory actions are treated differently from loans for defending civil or criminal proceedings? Conditions outlined in the new section 27B of the Business Trusts Act and in section 163A of the Companies Act appear to apply when the loans are for defending civil or criminal proceedings but not when the loans are for defending against regulatory actions. The reason for this distinction is unclear.

Secondly, can the Minister of State clarify whether loans for defending criminal or civil proceedings need to be repaid if charges are withdrawn and the director is issued a stern warning or for a discharge not amounting to an acquittal? The Bill makes clear that repayment must be made in certain other situations such as when the director is convicted in the proceedings but it does not state as much for this situation.

Thirdly, it is common for a defendant in criminal proceedings to be convicted on some charges and acquitted on others. Similarly, in civil proceedings, a defendant may succeed on certain heads of claim but not others. Can the Minister of State clarify how repayment should be treated in such cases? Will the director be required to repay only part of the loan? Alternatively, will the need for repayment be determined by whether the director has succeeded overall in the criminal or civil proceedings? If this is the case, how will overall success be determined? Is this determined by the number of charges or claims, or the severity of the charges or claims that the director succeeds on?

My second set of clarifications has to do with a trustee-managers' duties to maintain information.

The new section 52K requires the trustee-manager of a BT to take "reasonable steps" to identify registrable controllers of a BT. The scope of such duties is potentially very large. Can the Minister of State provide illustrations to guide these trustee-managers on what would constitute reasonable steps in the discharge of their duties?

Also, can the Minister of State clarify whether the new section 52N applies to someone who knows or ought to know that someone else may be a registrable controller? If not, can the Minister of State explain why the new section 52K, which enforces a similar requirement to disclose information, does not apply to such a person? It would be helpful to understand why the two sections, similar in their scope, do not apply the burden to the same groups of people.

Sir, notwithstanding these clarifications, I stand in support of the Bill.

Assoc Prof Jamus Lim.

Mr Speaker, the proposed amendments to the Business Trust Act are predominantly of a technical nature, with the goal of streamlining existing stipulations or to better align the Act with other Acts, in particular, the Companies Act and the Securities and Futures Act, or international standards, such as the International Financial Reporting Standards. To the extent that these amendments further strengthen the Government's provisions in BTs, many of these which have already been incorporated into other Acts, they are welcome.

For my speech, I wish to speak about three issues. I will begin by touching on a number of concerns directly related to the various amendments proposed by the Bill. Next, I will move on to discuss the implications that the Bill may have by further encouraging the BT structure for the economy at large. Finally, I will speak more generally about how trusts, along with foundations, may be repurposed as instruments that would enable the Government to better meet its fiscal objectives.

Before I proceed, I wish to declare that I am the Chief Economist (Emeritus) of Thirdrock, a homegrown boutique wealth management and consultancy business.

The Bill offers a host of amendments, some 124 pages worth, for an original Act that was just 14 pages longer. Some of these strike me as unambiguously good; others just a little bad and yet others just a tad ugly.

First, the Bill makes provision, captured in the revised section 20 of the Bill, that only a 50% majority, rather than the current supermajority of 75% of unit holders' approval is required to remove the trustee manager. This amendment corrects a longstanding, yet glaring discord between BTs and other related trust structures, notably real estate investments trusts (REITs), where only a simple majority was required for removing the manager. Given the enormous power vested into a trustee manager within the BT structure, this change will re-enfranchise the average unit holder. For this reason, the change is good and very much welcome.

Second, I would question the porting of certain amendments just because they have been stipulated in the Companies Act. As this House is likely aware, BTs are distinct from either corporations or trusts. For that reason, certain advantages offered to either pure business enterprises or trusts may not be as applicable to a BT. Let me offer two concrete examples.

The new sections 27B and 27C of the Act allows the trustee manager to extend trust monies via a loan on specified terms to trust directors, akin to sections of the Companies Act. One could credibly make an argument that directors of a firm are integral to its viability as a going concern and hence deserving of such support from the business entity. But the case is much harder to make for a trust. After all, the very design of a trust is already one step removed from the principles to allow business decisions to be rendered sufficiently independently of the directors.

As another example, the new section 52C vests on the MAS the ability to liquidate and deregister BTs. To be fair, this strikes me as a fairly pedestrian change that is likely to be invaluable for operational purposes. Still, I wish to seek the assurance of the Minister, that the MAS will only exercise this power to wind up BTs judiciously. In particular, it should already be clear with exercising this clause, that the trust is already clear defunct, rather than an exercise of this power as a means of regulation. By the same token, I wish to ask the Ministry to clarify the channels of appeal available to a BT in the event that it receives a request to wind up from the MAS, if it were to.

In my view, these appropriations from the Companies Act while undeniably better at aligning the two, do not sufficiently respect the distinctions between the two business structures and therefore, I find them at risk of being a little bombastic, admittedly, just a little ugly.

Third, there is a potential bad that I wish to highlight from promoting the BT structure, especially over and above a REIT structure. Sir, a casual examination of the current list of registered BTs reveals that eight of the 18 are essentially dealing in real estate, while another three had also, arguably have their fortunes tied to real estate assets.

Why should this matter? As industry observers are well aware, a BT is not constrained, in terms of the amount of leverage they are able to take on. In contrast, REITs are only able to be geared up to 50%. This introduces a potential concern, where essentially REITs are registering as a BT to avoid the prudential stipulations related in part to excess leverage. Indeed, while some BTs, do explicitly state that their practices more closely imitate REIT guidelines, such as restraining the amount of leverage that they take on, these are merely self-regulating assurances which are not limited by the force of law.

Sir, I fully grasp the motivation to expand the scope and accessibility of BTs. This vehicle offers greater flexibility in extracting value from cashflow generating assets over how distributions may be made and in structuring of assets under development. Undoubtedly, there are major reasons for their comparative popularity.

I also recognise that the benefits of BT from the perspective of our position as an international financial centre. Making as many possible asset management instruments available strengthens our relative attractiveness as an international financial and wealth management centre. It also allows our financial sector professionals and population at large to germinate keener interest and understanding of the role that increasingly more complex financial instruments play in our domestic and financial and economic landscape.

Even so, there are potential risks to the expanding role of BTs insofar as our economy is concerned. I had already alluded to on, pointing out that BTs are legally unconstrained by loan-to-value requirements and hence may engender greater financial stability concerns as a result.

Allow me to touch on another, one that may carry more profound implications for the average worker in the economy. As Members of this House are undoubtedly aware, business entities, whether taking the form of companies or a trust, typically adhere to the rigours of maximising profits and shareholder value. In a world unencumbered by non-monetary considerations, it would be difficult to fault either entity for being more brutal in imposing market discipline.

But we know that companies, large and small, deviate from this so-called neoclassical ideal all the time. Enterprises in China and Japan often strive to preserve employment, either for reasons of social stability or corporate loyalty. German businesses consider not just shareholder interests, but also stakeholder ones, with labour unions, routinely engage in workplace bargaining with management to deliver extra employment protections or social benefits. Even here at home, this Government has frequently trumpeted the importance of tripartite negotiations to promote aggregate welfare within our corporate context.

This begs the question of how BTs fit into this overall picture of stakeholder capitalism. If BTs increasingly become a favourite structure for managing large business asset holdings, would the additional distance between unit-holders and management afforded by the BT and by design, inadvertently undermine the ability of workers to engage in negotiations with management? Would we see greater willingness by BT-managed businesses to fire employees at the first whiff of a downturn? What are the implications of more REITS and real estate-focused BTs for escalating rent and sales prices, if such structures were to proliferate?

After all, the BT structure, as opposed to other forms of trusts, permit greater, proactive involvement of the trustee manager in the everyday firm operations. If this enhanced interventionism is paired with more flagrant disregard for non-pecuniary objectives – perhaps, because of differences in the investment horizon – then I fear that directed action by the trustee managers or their proxies on corporate decisions may induce more cut-throat behaviour by these firms in favour of capital, to the detriment of labour.

Finally, I would note that BTs do not have a distribution requirement whereas other trust frameworks, such as REITs, must respect a distribution of at least 90% of distributable income under the Income Tax Act. While this allows the trustee manager to exercise greater discretion in how they would translate cashflow into returns and is, in fact, one of the attractive aspects of a BT, one is left to wonder if this distinction ends up promoting excess accumulation and in turn, exacerbating wealth inequality.

This, of course, is a non-trivial matter, as this House is well aware. Social inequality has been rated by Singaporeans as their third most pressing concern, just behind bread-and-butter issues like employment and healthcare. This concern is especially acute among young Singaporeans who, perhaps predictably, feel like they have the greatest state in the yawning wealth gap. It has also been exacerbated by the influx of wealthy individuals from abroad.

What I am suggesting here is that we can go one step further and further refine our existing system. I previously alluded to how we could do this in the context of my Adjournment Motion on wealth taxation. I will now elaborate on this idea in greater detail.

While trusts may seem esoteric and limited to high net worth individuals, most of us would, in fact, be familiar with some form of trust. Most of us would have nominated beneficiaries to our insurance policies or CPF monies. Last year, this House also debated amendments to the Mental Capacity Act, which included extensive discussion of the Lasting Power of Attorney, which is a trust arrangement. Those of us lucky enough to have savings set aside in a unit trust will have some familiarity with such investment trusts. And of course, most of us have contributed to charities at some point in our lives and such philanthropic foundations are the cornerstone of trust institutions.

Thus, even without more involved estate planning, the average Singaporean would have some exposure to the notion of trust. Of course, those with more means will often rely on yet more sophisticated instruments to manage their estate. Private family trusts, as well as family offices are increasingly widespread here, allowing us to harness our global advantages as a wealth management centre. Investment oriented trust, including unit trusts or REITs and BTs – the focus of our debate today – enable such assets to grow in a manner unencumbered by tax considerations prior to vesting.

At the national level, this has promoted a landscape where trust institutions have become ever more important. The REIT asset class has grown to $130 billion in 2020. As Minister Tharman shared in response to my Sengkang colleague, Louis Chua's Parliamentary Question, the number of family offices has also almost doubled between 2020 and last year from 400 to 700. Our listed BTs now boasts a market capitalisation of close to $20.6 billion.

Yet, in spite of this rapid growth in investment-oriented trusts, there are only little more than 400 philanthropic organisations and trusts in Singapore.

The amount of tax-deductible donations received by charities has even receded slightly, from a peak of $1.07 billion in 2018, to $1.01 billion in 2020.

I venture that we can go further in how we manage our trust institutions, to not only accentuate their supply side, the growing of assets within a trust, but also to foster their demand side and evolve them into grant-making institutions and thereby, build a stronger culture of philanthropy among the wealthier in our nation.

Mr Speaker, we have come far as a nation. Since Independence, our per capita income, adjusted for inflation, have increased almost 16-fold, from around 5,800 to around 91,000 last year. We are, undeniably, no longer a developing country. Yet, our philanthropic culture still retains the vestiges of economies that are far less advanced. Our fiscal financing, while diversified, essentially relies on a regime of low income taxes, with charges and fees, which are regressive in nature, still playing a prominent role.

What I am suggesting is that we could put these two together, we could allow private and non-profit sectors to assume greater importance in financing various public expenditures. This goes beyond approaches currently favoured by this Government, such as public-private finance partnerships for infrastructure or the granting of the right to issue tax exempt receipts for Institutions of Public Character.

In many advanced economies, wealthy individuals fund a wide range of socially beneficial activities, from naming rights to hospitals and university buildings and even park benches, to setting up non-profit organisations dedicated to various causes, to establishing foundations that provide grants to groups aligned with the foundation's declared mandate.

One wonders if our tax structure could be further refined to provide additional incentives for business trusts to also be involved in philanthropic activities as well. In other jurisdictions, such activities are all often wholly unconstrained.

As a result, it could give rise to perverse situations where a billionaire's favourite pastimes, such as art galleries or classical music concerts are financed through tax exemptions, while causes that benefit the poor remain relatively underfunded, or foundations could become indirect wealth accumulation vehicles.

To prevent such outcomes, we should insist that our foundations consistently deplete their endowments by funding approved fiscal expenditures until a stipulated closure date. Foundations may retain some independence over their target expenditures, but these areas would be pre-selected by the Government.

This will result in an indirect wealth tax that carries significant social capital, appealing to high net worth individuals' sense of agency, civic responsibility and earnestness. This could also encourage the development of fundraising and grant writing expertise in our domestic workforce.

Besides potentially expanding a small cottage industry in the social sector, it could also increase the awareness of, and affinity towards important causes that are valuable to our society.

In my conversations with those in industry, I have been impressed by the complementarities that exists between the supply and demand sides of the story. Indeed, many donor trusts and foundations, private banking clients and non-profits are served by the self-same assets and wealth management professionals.

As we position ourselves to mature even more as a global wealth management hub, enhancing such intermediary functions is a logical next step. My hopes, Sir, is that trusts and foundations will eventually become a part of our nation's social fabric, that we will not just privilege certain trust structures, such as investments or business trusts, to the detriment of others that will enrich the life of our citizens as well as our economy.

Minister of State Alvin Tan.

Mr Speaker, Sir, I thank Mr Louis Ng and Assoc Prof Jamus Lim for their views on the Bill. I will first address specific questions raised in the Bill before tackling the broader questions on the relevance of BTs' structure and the trust foundations in the philanthropy landscape. But I also wanted to say that, for the purposes of this amendment Bill that we focus very much on the core of what we are trying to do, which is to enhance the transparency and strengthen governance of Business Trusts(BTs). And for many other topics, we can leave that on another day.

On the Bill, both Mr Louis Ng and Assoc Prof Jamus Lim raised questions on provisions that will seek to align the BTA with a regulatory regime for companies. Assoc Prof Jamus Lim asked about the appropriateness of replicating the Companies Act's provisions in the BTA, as well as whether we need to strengthen the regulatory regime for business trusts relative to the regulatory regime for REITs.

BTs, as the Member had noted, is also meant to be an alternative business structure to companies. Hence, the regulatory regime for BTs is modelled after that of companies. Similar to the Companies Act, the intention of the BTA is to set out requirements to protect, indeed, the fundamental rights of unit-holders of these registered business trusts and to set out the duties and accountability of the trustee-managers and their directors. That is at the fundamental level.

And then on top of requirements that we have adapted from the Companies Act, MAS has also included relevant governance requirements from the REIT regime. BTs and REITs, of course, share a lot of structural similarity. For example, both are externally managed, as I had mentioned in my speech. MAS has also taken reference from applicable REIT rules when reviewing the BTA, especially in areas where the risks are similar.

For instance, MAS has, in this Bill, proposed that the removal threshold for trustee-managers be aligned with that for REIT managers. If you reference the requirements for REIT managers, MAS is also considering amending subsidiary legislation of the BTA to enhance independence requirements for directors of trustee-managers. MAS will be consulting on its suite of proposed amendments to subsidiary legislation of the BTA in the coming months.

Just a few points about the fiduciary role of the directors of the trustee-manager. The directors of a trustee-manager essentially perform the same fiduciary role as the directors of a company. Hence, we are trying to align the BTA with the Companies Act. The provisions allowing loans to be given to directors of companies are also relevant to the directors of trustee-managers within the BTA.

On whether vehicles are trying to get away with easier regulations as regard to the BT versus REIT – companies, BTs and REITs are, in fact, all subject to corporate governance requirements.

Assets that do not fall neatly under a REIT structure can be included in a company structure. It is important that we have these proper rules and consistent rules for both companies and BTs. And that is why, again, going back to the fundamentals, that is why we are aligning the BTA to the Companies Act.

On section 52, it is an existing provision that MAS may apply to a Court, to appoint a liquidator to wind up, and thereafter, deregister a defunct BT. The new section 52B provides for any persons with reasonable cause, that the BT should not be deregistered to object when MAS issues a notice of its intention to apply to Court for liquidation.

The context of section 52 is actually for a defunct BT, but it is actually not for still functioning BTs – just to clarify that point, which is quite important.

The Member, Assoc Prof Jamus Lim also mentioned about the distance between trustee-managers in a BT, and unit-holders or stakeholders. The trustee-manager, in this regard, has to manage businesses and operations, just in the same way as the board or the management of companies and has to similarly consider the interest of key stakeholders, in order for the business to be successful. Again, going back to it, is really aligning both.

On the distribution of REITs, I just want to clarify that REITs must distribute 90% of the income in order for them to enjoy tax transparency. In fact, REITs are required to distribute least 90% of their distributable income to enjoy this tax transparency, where BTs do not enjoy any tax transparency and, hence, are not subject to similar requirements. There are differences between REITs, as well as BTs and that is why although they are structurally similar, some of the provisions, we have to regard them as separate as well.

I will address other points with regards to trust and REITs. REITs are investment funds which are obviously subjected to investment guidelines and are intended to specifically hold income-producing properties. The business trusts are not investment funds. They are business structures which can hold the wide range of assets. Assoc Prof Jamus Lim mentioned many of the 18 that he raised earlier on. So, they do hold a wide range of assets but they are not limited to real estate, although many that Assoc Prof Jamus Lim raised appear to be linked to real estate, but they can also operate active businesses.